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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- Schmidt, Klaus M. & Schnitzer, Monika, 1995.
"The interaction of explicit and implicit contracts,"
Elsevier, vol. 48(2), pages 193-199, May.
- Monika Schnitzer, 1994. "The Interaction of Explicit and Implicit Contracts," Discussion Paper Serie A 452, University of Bonn, Germany.
- Schmidt, Klaus M. & Schnitzer, Monika, 1995. "The interaction of explicit and implicit contracts," Munich Reprints in Economics 19763, University of Munich, Department of Economics.
- 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.
- 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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