Duopoly supergames with product differentiation

Tacit collusion in differentiated cournot games

“…If the firms use the inoptimal Coumot-Nash punishments suggested by Deneckere (1983Deneckere ( , 1984, the analog of (4" is bigger. Since these punishments become less severe as /?…”

“…However, following Deneckere (1983Deneckere ( , 1984, we look at the critical interest rate implied by (4"). That is, we will ask if increasing j3.s allows a given y,(n) to be maintained for even larger values of r. Using the implicit function on (4"), we find that aF -=~(y2-y~[~+(l-P)~l)>o. ar Accordingly, dr/dp > 0, such that more product differentiation allows a given output to be maintained with higher discount rate, if ar*,G@ < ((1 + r)/r)ar/aj3, that is, if the penalty effect dominates.…”

“…The relationship between product differentiation and tacit collusion has been analyzed by Deneckere (1983Deneckere ( ,1984. For Cournot games, he assumed that collusion is supported by the threat of reverting to the equilibrium of the one shot game.…”

Should One Sell Domestic Firms to Foreign Ones? A Tale of Delegation, Acquisition and Collusion

“…As 0; the partial derivative computed above is strictly negative, which implies that the optimal (corner) solution is i = 0 for all domestic owners 3 . In other words, when the domestic owners collude to maximize joint pro…ts, the optimal choice is to hire no manager and behave as pure pro…t-maximizers.…”

“…Several contributions have studied the factors and conditions a¤ecting …rms'ability to implement collusive practices over time, investigating, for example, the consequences of heterogeneity among agents ( see, inter alia, d 'Aspremont et al (1983), Donsimoni (1985), Donsimoni et al (1986)), the role of imperfect information (Green and Porter (1984), Rothschild (1999)) and of product di¤erentia-tion (Ross (1992), Deneckere (1983)), the e¤ect of the imposition of import quotas (Rotemberg and Saloner, (1986)) or the consequences that fringes of non-colluding …rms have on cartel stability (Sha¤er (1995)). …”