I thank the New Century Excellent Talents in University program (No. NCET-11-0751) for financial support. I thank Julian Wright for insightful discussions, the anonymous referee for comments and suggestions, and seminar participants at the Central University of Finance and Economics for their comments on earlier versions of this paper. Any errors are my own.
TACIT COLLUSION WITH QUANTITY-MATCHING PUNISHMENTS IN A HOMOGENEOUS MARKET*
Article first published online: 28 MAY 2012
© 2012 The Author. The Manchester School © 2012 John Wiley & Sons Ltd and The University of Manchester
The Manchester School
Volume 81, Issue 4, pages 550–561, July 2013
How to Cite
LU, Y. (2013), TACIT COLLUSION WITH QUANTITY-MATCHING PUNISHMENTS IN A HOMOGENEOUS MARKET. The Manchester School, 81: 550–561. doi: 10.1111/j.1467-9957.2012.02299.x
Manuscript received 10.1.11; final version received 27.8.11.
- Issue published online: 18 JUN 2013
- Article first published online: 28 MAY 2012
Tacit collusion with quantity-matching punishments in a homogeneous market is investigated. The findings are the following: (i) tacit collusion can arise with quantity-matching punishments in a homogeneous market, (ii) the monopoly quantity cannot be supported by quantity-matching punishment strategy, and (iii) compared with Nash-reversion punishments, collusion is no easier to sustain, but not necessarily harder. The results are compared with those in Lu and Wright (International Journal of Industrial Organization, Vol. 28 (2010), pp. 298–306) with price-matching punishments. A linear demand example is provided to illustrate the theory.