Profit-sharing in a collusive industry
AbstractWe study a model in which collusive duopolists divide up the monopoly profit according to their relative bargaining power. We are particularly interested in how the negotiated profit shares depend on the sizes of the firms. If each can produce at the same constant unit cost up to its capacity, we show that the profit per unit of capacity of the small firm is higher than that of the large one. We also study how the ratio of the negotiated profits depends on the size of demand relative to industry capacity, and how this ratio changes with variations in demand.
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Bibliographic InfoArticle provided by Elsevier in its journal European Economic Review.
Volume (Year): 22 (1983)
Issue (Month): 1 (June)
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Web page: http://www.elsevier.com/locate/eer
Other versions of this item:
- Osborne, Martin J. & Pitchik, Carolyn, 1983. "Profit-Sharing in a Collusive Industry," Working Papers 83-06, C.V. Starr Center for Applied Economics, New York University.
- Martin J. Osborne & Carolyn Pitchik, 1983. "Profit-Sharing in a Collusive Industry," Cowles Foundation Discussion Papers 668, Cowles Foundation for Research in Economics, Yale University.
- C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models &bull Diffusion Processes
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.:
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