Abstract
In this paper, two firms play an infinitely-repeated Bertrand game, and each firm has an agent who produces the firm's output and holds private information about production costs. The colluding firms fix prices and allocate market shares based on their agents' information. We develop a model of collusion in which firms use the presence of agents as a strategic opportunity to restrict their incentives to distort private information. We show that such firm behavior may expand the scope of optimal collusion whether market-allocation schemes are asymmetric or symmetric.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.