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Author: | Prokop, J. |
Title: | Process of dominant-cartel formation |
Journal: | International Journal of Industrial Organization
1999 : FEB, VOL. 17:2, p. 241-258 |
Index terms: | INDUSTRIAL ORGANIZATION CARTELS LEADERSHIP |
Language: | eng |
Abstract: | This paper considers the process of cartel formation in the industries characterized by collusive price-leadership. In contrast to the preceding literature, the focus of the analysis is shifted from the problem of cartel stability towards the process of forming a stable cartel. Two models of the dominant-cartel-formation process are proposed: a sequential-, and simultaneous-moves game of firms. The sequential-moves game shows a possibility of creating a stable cartel when the firms have commitment power to refuse the cartel membership. |
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