Export Cartels and Domestic Markets
This paper considers the effect of monopoly-promoting export cartels on domestic production. It is argued that export cartels facilitate tacit collusion by monitoring defections more efficiently. This slackesn the incentive constraint of tacit collusion. Optimizing firms competing both in the domestic and export markets will often use the icnreased possiblity for collusion in both markets. A condition is given under which this is the case.
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Volume (Year): 2 (2002)
Issue (Month): 3 (September)
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References listed on IDEAS
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- Friedman, James W, 1971. "A Non-cooperative Equilibrium for Supergames," Review of Economic Studies, Wiley Blackwell, vol. 38(113), pages 1-12, January.
- Schmidt, Klaus M. & Schnitzer, Monika, 1995.
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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.
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