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Cartel Stability and the Curvature of Market Demand

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  • L. Lambertini

Abstract

The stability of collusion is analysed for a family of demand functions whose curvature is determined by a parameter varying between zero and infinity. If demand is sufficiently convex, firms may prefer to act as quantity setters in order to increase cartel stability. Otherwise, price-setting behaviour enhances their ability to collude.

Suggested Citation

  • L. Lambertini, 1994. "Cartel Stability and the Curvature of Market Demand," Working Papers 211, Dipartimento Scienze Economiche, Universita' di Bologna.
    • Handle: RePEc:bol:bodewp:211
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    References listed on IDEAS

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    Cited by:

    1. Posada, P., 2000. "Cartel Stability and Product Differentiation: How Much Do the Size of the Cartel and the Size of the Industry Matter?," The Warwick Economics Research Paper Series (TWERPS) 556, University of Warwick, Department of Economics.
    2. Connor, John M., 1997. "Archer Daniels Midland: Price Fixer To The World," Staff Papers 28653, Purdue University, Department of Agricultural Economics.
    3. Posada, Pedro, 2000. "Cartel Stability and Product Di¤erentiation: How Much Do the Size of the Cartel and the Size of the Industry Matter?," Economic Research Papers 269307, University of Warwick - Department of Economics.
    4. David R. Collie, 2006. "Collusion in Differentiated Duopolies with Quadratic Costs," Bulletin of Economic Research, Wiley Blackwell, vol. 58(2), pages 151-159, April.
    5. David Collie, 2004. "Collusion and the elasticity of demand," Economics Bulletin, AccessEcon, vol. 12(3), pages 1-6.
    6. Helmuts Azacis & David R Collie, 2018. "Taxation and the sustainability of collusion: ad valorem versus specific taxes," Journal of Economics, Springer, vol. 125(2), pages 173-188, October.
    7. Zimmerman, Paul R., 2010. "On the sustainability of collusion in Bertrand supergames with discrete pricing and nonlinear demand," MPRA Paper 20249, University Library of Munich, Germany.
    8. R. Cellini & L. Lambertini, 2003. "Advertising in a Differential Oligopoly Game," Journal of Optimization Theory and Applications, Springer, vol. 116(1), pages 61-81, January.
    9. R. Cellini & L. Lambertini, 2000. "Non-Linear Market Demand and Capital Accumulation in A Differential Oligopoly Game," Working Papers 372, Dipartimento Scienze Economiche, Universita' di Bologna.
    10. Luca Lambertini, 2000. "Technology and Cartel Stability under Vertical Differentiation," German Economic Review, Verein für Socialpolitik, vol. 1(4), pages 421-442, November.
    11. L. Lambertini & M. Trombetta, 1997. "Delegation Affect Firms' Ability to Collude," Working Papers 275, Dipartimento Scienze Economiche, Universita' di Bologna.

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