Collusion in Differentiated Duopolies with Quadratic Costs

Collie, David Robert ORCID: https://orcid.org/0000-0002-3132-648X 2006. Collusion in Differentiated Duopolies with Quadratic Costs. Bulletin of Economic Research 58 (2) , pp. 151-159. 10.1111/j.0307-3378.2006.00235.x

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Abstract

The analysis of collusion in infinitely repeated duopoly games has generally assumed that marginal cost is constant, but this note uses quadratic costs (linear marginal costs) to compare the sustainability of collusion under Bertrand and Cournot duopoly with differentiated products. It is shown that when marginal costs are sufficiently increasing in output, then it is always easier to sustain collusion under Cournot duopoly than under Bertrand duopoly for any degree of product substitutability.

Item Type:	Article
Date Type:	Publication
Status:	Published
Schools:	Business (Including Economics)
Subjects:	H Social Sciences > H Social Sciences (General) H Social Sciences > HB Economic Theory
Uncontrolled Keywords:	Bertrand duopoly; cartel; Cournot duopoly; product differentiation
Publisher:	Wiley-Blackwell
ISSN:	0307-3378
Last Modified:	21 Oct 2022 10:06
URI:	https://orca.cardiff.ac.uk/id/eprint/39046

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