On the tacit collusion equilibria of a dynamic duopoly investment game
AbstractThis note extends the characterization of simultaneous investment (tacit collusion) equilibria in Boyer, Lasserre and Moreaux (2012). Tacit collusion equilibria may or may not exist, and when they do may involve either finite time investments (type 1) or infinite delay (type 2). The relationship between equilibria and common demand forms is not immediately apparent. We provide the full necessary and sufficient conditions for existence. A simple condition on demand primitives is derived that determines the type of equilibria. Common demand forms are then shown to illustrate both finite-time and infinite-delay tacit collusion.
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Bibliographic InfoArticle provided by AccessEcon in its journal Economics Bulletin.
Volume (Year): 32 (2012)
Issue (Month): 4 ()
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Real options; Duopoly; Collusion; Investment;
Find related papers by JEL classification:
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
- D9 - Microeconomics - - Intertemporal Choice
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Boyer, Marcel & Lasserre, Pierre & Moreaux, Michel, 2012.
"A dynamic duopoly investment game without commitment under uncertain market expansion,"
International Journal of Industrial Organization,
Elsevier, vol. 30(6), pages 663-681.
- Marcel Boyer & Pierre Lasserre & Michel Moreaux, 2011. "A Dynamic Duopoly Investment Game without Commitment under Uncertain Market Expansion," CIRANO Working Papers 2011s-65, CIRANO.
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