Stable cartel with a cournot fringe in a symmetric oligopoly
Keio Economic studies
Keio Economic Society, Keio University
Stable cartel, Stackelberg quantity leader, Cournot fringe
We consider a symmetric cartel formation game where the cartel, once formed, acts as a Stackelberg quantity leader and the nonmember firms play the Cournot game with respect to the residual demand. We show the existence of a stable cartel under fairly general demand and cost conditions. We also compare by means of numerical examples the size of stable cartels in our model with that in the price leadership model of d'Aspremont et al.
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Konishi, H., & Lin, P. (1999). Stable cartel with a cournot fringe in a symmetric oligopoly. Keio Economic studies, 36(2), 1-10. Retrieved from http://koara.lib.keio.ac.jp/xoonips/modules/xoonips/detail.php?koara_id=AA00260492-19990002-0001