Stable cartel with a cournot fringe in a symmetric oligopoly

Hideo KONISHI, Ping LIN

Research output: Journal PublicationsJournal Article (refereed)

Abstract

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.
Original languageEnglish
Pages (from-to)1-10
Number of pages10
JournalKeio Economic studies
Volume36
Issue number2
Publication statusPublished - 1 Oct 1999

Keywords

  • Cournot fringe
  • Stable cartel
  • Stackelberg quantity leader

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