Upstream collusion with down stream compensation
Department of Economics, Lingnan University
10:30 - 12:00
Many cartels exist in supply chains with powerful buyers. These buyers have incentive and information to report the cartels to the antitrust authorities or sue the cartel members. Therefore, successful upstream collusions not only need to prevent the collusive members from deviating, but also have to compensate the downstream firms. Using repeat game, this paper studies the stability of upstream collusion, taking into account the downstream compensation. Different from the standard collusion theory, the relationship between cartel incidence and market concentration is likely to be nonmonotonic, or it is the inverted U-shape.
Yao, Z. (2021, January 26). Upstream collusion with down stream compensation [Video podcast]. Retrieved from https://commons.ln.edu.hk/videos/853/