Cartel sustainability and cartel stability

• Autores: Marc Escrihuela Villar
• Localización: Working papers = Documentos de trabajo: Serie AD, Nº. 16, 2002
• Idioma: inglés
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• Resumen

  • The paper studies how does the size of a cartel affect the possibility that its members can sustain a collusive agreement. I obtain that collusion is easier to sustain the larger the cartel is. Then, I explore the implications of this result on the incentives of firms to participate in a cartel. Firms will be more willing to participate because otherwise, they risk that collusion completely collapses, as remaining cartel members are unable to sustain collusion.