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Two-Stage Quantity-Setting Games and Tacit Collusion

Author

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  • Kazuhiro Ohnishi

    (Osaka University)

Abstract

This paper considers a two-stage quantity-setting duopoly model. The paper classifies demand functions into the following four cases in terms of the goods relevance and strategic relevance between both firms: ‘substitute goods and strategic substitutes’, ‘substitute goods and strategic complements’, ‘complementary goods and strategic complements’ and ‘complementary goods and strategic substitutes’. The paper correlates each case with two opposite strategic commitments. The paper examines the possibility of tacit collusion in each of four cases.

Suggested Citation

  • Kazuhiro Ohnishi, 2011. "Two-Stage Quantity-Setting Games and Tacit Collusion," Finnish Economic Papers, Finnish Economic Association, vol. 24(1), pages 64-77, Spring.
    • Handle: RePEc:fep:journl:v:24:y:2011:i:1:p:64-77
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    File URL: http://taloustieteellinenyhdistys.fi/images/stories/fep/fep12011/fep12011_ohnishi.pdf
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    References listed on IDEAS

    as
    1. Susan Athey & Kyle Bagwell & Chris Sanchirico, 2004. "Collusion and Price Rigidity," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 71(2), pages 317-349.
    2. Athey, Susan & Bagwell, Kyle, 2001. "Optimal Collusion with Private Information," RAND Journal of Economics, The RAND Corporation, vol. 32(3), pages 428-465, Autumn.
    3. Bulow, Jeremy I & Geanakoplos, John D & Klemperer, Paul D, 1985. "Multimarket Oligopoly: Strategic Substitutes and Complements," Journal of Political Economy, University of Chicago Press, vol. 93(3), pages 488-511, June.
    4. Cabral, Luis M. B., 2000. "Introduction to Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262032864, December.
    5. Luca Colombo & Paola Labrecciosa, 2007. "Sustaining Collusion under Economic Integration," Review of International Economics, Wiley Blackwell, vol. 15(5), pages 905-915, November.
    6. Abreu, Dilip, 1986. "Extremal equilibria of oligopolistic supergames," Journal of Economic Theory, Elsevier, vol. 39(1), pages 191-225, June.
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    Cited by:

    1. Ohnishi, Kazuhiro, 2018. "Wage-Rise Contract and Labour-Managed Cournot Oligopoly with Complementary Goods," MPRA Paper 88235, University Library of Munich, Germany.

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    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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