Electronic Resource
Oxford, UK
:
Blackwell Publishing Ltd
Bulletin of economic research
38 (1986), S. 0
ISSN:
1467-8586
Source:
Blackwell Publishing Journal Backfiles 1879-2005
Topics:
Economics
Notes:
Osborne noted five problems a cartel has in restricting output to the mutual benefit of its members. Here, we examine one of these: the problem of location of the contract surface. We first model the situation where one firm is able to mislead cartel members about the level of its cost function. We show there is often, in theory, an incentive to do this and thereby increase profit if marginal costs are rising, though not if they are falling. We go on to examine the case where both firms cheat, and to consider possible solutions the cartel might adopt.
Type of Medium:
Electronic Resource
URL:
http://dx.doi.org/10.1111/j.1467-8586.1986.tb00217.x
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