Power of communication

Research output: Contribution to journalArticle

13 Scopus citations

Abstract

In this paper, I offer two ways in which firms can collude: secret monitoring and infrequent coordination. Such collusion is enforceable with intuitive communication protocols. I make my case in the context of a repeated Cournot oligopoly with flexible production, prices that follow a Brownian motion and no monetary side payments, an environment where it has previously been argued that any collusion is impossible. Trade associations can easily facilitate collusion by mediating communication amongst firms.

Original languageEnglish (US)
Pages (from-to)3737-3751
Number of pages15
JournalAmerican Economic Review
Volume104
Issue number11
DOIs
StatePublished - Nov 1 2014

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