Suppose, in the collusive agreement
, firm i keeps a share [alpha] [member of] (0, 1) of the profits for itself and splits the remaining (1 - [alpha]) share equally among the two raiding firms.
It needs to be a method of initial and quick verification of a hypotheses of the existence of a collusive agreement
in an industry/a corresponding market which may be applied straightforwardly to the existing data;
Moreover, for a given number of firms, as the amount of detection lag increases a higher [delta] is needed to maintain the collusive agreement
The court reasoned this evidence indicated the opposite of a collusive agreement
because moving PacifiCare to United's contract was the reverse of what Omnicare alleged the collusion was between United and PacifiCare.
Because of the role that the preannouncement of price increases can play in supporting a collusive agreement
, competition authorities have in certain cases prohibited the announcement of prices prior to their effective date.
The economic interpretation of the gotten results is based, not only on models of differentiation and competition, but also on the possibility that the duopolist conclude collusive agreement
Using the same approach as above, we get the full solutions for prices and quantities corresponding to the market resulting from the collusive agreement
firms to maintain their collusive agreements
as the one-period benefit
107) Stigler argues: "The reconciliation is found in the problem of policing a collusive agreement
, which proves to be a problem in the theory of information.
Similarly, in New York in 1995, a foreign firm argued that an AD action was exercised against it as a response by the domestic firm for the negative to accept a collusive agreement
(Taylor, 2001, p.
This ceiling provides a publicly observable gauge that the colluding firms can use to judge compliance with a collusive agreement
Generally, a collusive agreement
would be easier to enforce if the number of firms is small, demand is stable, pricing information is widely circulated and the firms produce homogeneous products.
But if the profit gains from collusion are substantially high relative to the costs of operating the collusive agreement
(including fines and any other types of punitive liabilities), then the companies have incentives to operate the collusive agreements
If the merger is likely to facilitate explicit or implicit collusion, the government will then determine whether the participants could detect and punish violations of any collusive agreement
This experiment may help instructors understand student behavior by observing students in a situation similar to that faced by interdependent firms in a collusive agreement