Stochastic Market Sharing , Partial Communication and Collusion

@inproceedings{Gerlach2006StochasticMS,
  title={Stochastic Market Sharing , Partial Communication and Collusion},
  author={Heiko A. Gerlach},
  year={2006}
}
This paper analyzes the role of communication between firms in an infinitely repeated Bertrand game in which firms receive an imperfect private signal of a common value i.i.d. demand shock. It is shown that firms can use stochastic, inter-temporal market sharing as a perfect substitute for communication in low demand states. Therefore, partial communication in high demand states is sufficient to achieve the most collusive, full communication outcome. And partial communication in low demand… CONTINUE READING

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