The Value of Collusion with Endogenous Capacity and Demand Uncertainty
Paha J (2017)
Publication Type: Journal article
Publication year: 2017
Journal
Book Volume: 65
Pages Range: 623-653
Journal Issue: 3
DOI: 10.1111/joie.12143
Abstract
Collusion has often been alleged in industries where long-lived capacity investments are important. This article develops a computational duopoly model with capacity investments, demand shocks and either competitive or collusive pricing. It shows that allowing for endogenous capacity investments can sometimes make collusion less valuable than competition and that it can change the normal relationships between the profitability of collusion and both the discount rate and industry-wide demand shocks.
Involved external institutions
Germany (DE)How to cite
APA:
Paha, J. (2017). The Value of Collusion with Endogenous Capacity and Demand Uncertainty. Journal of Industrial Economics, 65(3), 623-653. https://dx.doi.org/10.1111/joie.12143
MLA:
Paha, Johannes. "The Value of Collusion with Endogenous Capacity and Demand Uncertainty." Journal of Industrial Economics 65.3 (2017): 623-653.
BibTeX: Download