Collusive price rigidity under price-matching punishments

By analysing an infinitely repeated game where unit costs alternate stochastically between low and high states and where firms follow a price-matching punishment strategy, we demonstrate that the best collusive prices are rigid over time when the two cost levels are sufficiently close. This provides...

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Bibliographic Details
Main Author: Luke Garrod
Format: Default Article
Published: 2012
Subjects:
Other economics not elsewhere classified
Tacit collusion
Kinked demand curve
Price rigidity
Economics not elsewhere classified
Online Access:https://hdl.handle.net/2134/14709
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https://hdl.handle.net/2134/14709

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