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Action Timing as a Collusive Common Good

Author

Listed:
  • Nobuo Akai

    (School of Business Administration, University of Hyogo and CIRJE)

  • Dan Sasaki

    (Institute of Social Science, University of Tokyo)

Abstract

Frequent revision of firms' actions facilitates to sustain tacit collusion. Even when some, not all, firms revise their actions with enhanced frequency, the change contributes positively to collusive sustainability, i.e., lowering the critical discount factor. In this sense, the added frequency in revising actions can be viewed as a common good shared among oligopolists. Particularly noteworthy is the fact that, in a large class of environments, a firm's deviation can be deterred by no more than one punisher, implying that at most two firms need to invest in frequent revision in order to sustain collusion.

Suggested Citation

  • Nobuo Akai & Dan Sasaki, 2005. "Action Timing as a Collusive Common Good," CIRJE F-Series CIRJE-F-333, CIRJE, Faculty of Economics, University of Tokyo.
    • Handle: RePEc:tky:fseres:2005cf333
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    File URL: http://www.cirje.e.u-tokyo.ac.jp/research/dp/2005/2005cf333.pdf
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