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Prisoners` Dilemma in Duopoly Supergames

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  • L. Lambertini

Abstract

The choice between quantity and price in order to stabilize collusion is modeled here. It is shown that this relocates the prisoners dilemma backwards, from the market stage to the stage where the market variable is chosen in order to sustain collusion, and where discount rates appear as the payo s. Likewise, a prisoners dilemma arises also when both the market variable and the type of behavior (cooperative or non-cooperative) are simultaneously chosen.

Suggested Citation

  • L. Lambertini, 1996. "Prisoners` Dilemma in Duopoly Supergames," Working Papers 264, Dipartimento Scienze Economiche, Universita' di Bologna.
    • Handle: RePEc:bol:bodewp:264
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    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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