Econometrica: Jan 1984, Volume 52, Issue 1
Noncooperative Collusion under Imperfect Price Information
Edward J. Green, Robert H. PorterRecent work in game theory has shown that, in principle, it may be possible for firms in an industry to form a self-policing cartel to maximize their joint profits. This paper examines the nature of cartel self-enforcement in the presence of demand uncertainty. A model of a noncooperatively supported cartel is presented, and the aspects of industry structure which would make such a cartel viable are discussed.
Log In To View Full Content