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Two-Stage Quantity-Setting Games and Tacit Collusion

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  • Kazuhiro Ohnishi

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    (Osaka University)

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    Abstract

    This paper considers a two-stage quantity-setting duopoly model. The paper classifies demand functions into the following four cases in terms of the goods relevance and strategic relevance between both firms: ‘substitute goods and strategic substitutes’, ‘substitute goods and strategic complements’, ‘complementary goods and strategic complements’ and ‘complementary goods and strategic substitutes’. The paper correlates each case with two opposite strategic commitments. The paper examines the possibility of tacit collusion in each of four cases.

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    Bibliographic Info

    Article provided by Finnish Economic Association in its journal Finnish Economic Papers.

    Volume (Year): 24 (2011)
    Issue (Month): 1 (Spring)
    Pages: 64-77

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    Handle: RePEc:fep:journl:v:24:y:2011:i:1:p:64-77

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    1. Susan Athey & Kyle Bagwell & Chris Sanchirico, 2002. "Collusion and price rigidity," Discussion Papers 0102-38, Columbia University, Department of Economics.
    2. Luca Colombo & Paola Labrecciosa, 2007. "Sustaining Collusion under Economic Integration," Review of International Economics, Wiley Blackwell, vol. 15(5), pages 905-915, November.
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