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Aggregate Efficiency, Market Demand, And The Sustainability Of Collusion

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  • Lambson, Val Eugene

Abstract

The effects of firms' aggregate productive efficiency and the level of demand on collusion are studied by considering very general collections of Cournot markets that differ in these variables. The results are very general. Firms are not required to be identical within nor across markets and the number of firms and level of demand are allowed to vary without restriction across markets. It is found that collusion can be ruled out in markets where aggregate efficiency (i.e. the ability of firms to profitably produce at prices exceeding the Cournot price) is large relative to the level of demand.

Suggested Citation

  • Lambson, Val Eugene, 1985. "Aggregate Efficiency, Market Demand, And The Sustainability Of Collusion," SSRI Workshop Series 292674, University of Wisconsin-Madison, Social Systems Research Institute.
    • Handle: RePEc:ags:uwssri:292674
    DOI: 10.22004/ag.econ.292674
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