Farsighted Coalitional Stability Of A Price Leadership Cartel

Yoshio Kamijo, Shigeo Muto

Research output: Contribution to journalArticle

6 Citations (Scopus)

Abstract

This paper analyzes the farsighted behaviour of firms that form a dominant price leadership cartel. We consider stability concepts such as the farsighted core, the farsighted stable sets, and the largest consistent set. We show that: (i) the farsighted core is either an empty set or a singleton set of the grand cartel; (ii) any Pareto efficient cartel is itself a farsighted stable set; and (iii) the set of cartels in which fringe firms enjoy higher profits than the firms in the minimal Pareto efficient cartel is the largest consistent set.

Original languageEnglish
Pages (from-to)455-465
Number of pages11
JournalJapanese Economic Review
Volume61
Issue number4
DOIs
Publication statusPublished - 2010 Dec

ASJC Scopus subject areas

  • Economics and Econometrics

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