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Query: faculty: "FEB" and publication year: "2006"

AuthorJ. Hinloopen
TitleInternal cartel stability with time-dependent detection probabilities
JournalInternational Journal of Industrial Organization
Volume24
Year2006
Issue6
Pages1213-1229
ISSN01677187
FacultyFaculty of Economics and Business
Institute/dept.FEB: Amsterdam School of Economics Research Institute (ASE-RI)
AbstractTo account for the illegal nature of price-fixing agreements, per-period detection probabilities that can vary over time are introduced in a dynamic oligopoly. The resulting ICCs for internal cartel stability indicate that for discount factors up to 10% per-period detection probabilities of 5% are needed to reduce the number of cartel members by 50%. For the special case of stationary supergames with constant per-period detection probabilities p elegant rules emerge: internal cartel stability requires the discount factor to increase with 100xp/(1-p) percent while a fixed fine of 100x(1-p)/p percent of incremental cartel profits is required for making the ICC always binding.
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