Sustainable collusion on separate markets
In a Cournot duopoly where firms incur a fixed cost for serving each market, collusion is easier to sustain with production quotas if the fixed cost is small enough, and with market sharing agreements if it is large enough.
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- James W. Friedman, 1971. "A Non-cooperative Equilibrium for Supergames," Review of Economic Studies, Oxford University Press, vol. 38(1), pages 1-12.
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- B. Douglas Bernheim & Michael D. Whinston, 1990. "Multimarket Contact and Collusive Behavior," RAND Journal of Economics, The RAND Corporation, vol. 21(1), pages 1-26, Spring.
- Abreu, Dilip, 1986. "Extremal equilibria of oligopolistic supergames," Journal of Economic Theory, Elsevier, vol. 39(1), pages 191-225, June. Full references (including those not matched with items on IDEAS)