According to traditional IO models, the characteristics of market demand (intercept, slope, elasticity) and of technology (level of symmetric marginal costs) do not play any role in defining the sustainability of collusive behaviors in Bertrand oligopolies. The paper modifies this counterintuitive result by showing that all the above mentioned factors do a¤ect the sustainability of collusion when prices are assumed to be discrete rather than continuous. The sign of these effects is unambiguous. Their magnitude varies greatly: in some cases it is totally negligible, in others it becomes extremely relevant.
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Paper provided by ICER - International Centre for Economic Research in its series ICER Working Papers with number
03-2008.
Length: 20 pages Date of creation: Jun 2008 Date of revision: Handle: RePEc:icr:wpicer:03-2008
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References listed on IDEAS 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.:
Ivaldi, Marc & Jullien, Bruno & Rey, Patrick & Seabright, Paul & Tirole, Jean, 2003.
"The Economics of Tacit Collusion,"
IDEI Working Papers
186, Institut d'Économie Industrielle (IDEI), Toulouse.
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