Cartel stability under quality differentiation

C-Tier
Journal: Economics Letters
Year: 2019
Volume: 174
Issue: C
Pages: 70-73

Score contribution per author:

0.503 = (α=2.01 / 2 authors) × 0.5x C-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

This note considers cartel stability when the cartelized products are vertically differentiated. If market shares are maintained at pre-collusive levels, then the firm with the lowest competitive price-cost margin has the strongest incentive to deviate from the collusive agreement. The lowest-quality supplier has the tightest incentive constraint when the difference in unit production costs is sufficiently small.

Technical Details

RePEc Handle
repec:eee:ecolet:v:174:y:2019:i:c:p:70-73
Journal Field
General
Author Count
2
Added to Database
2026-01-24