Journal article

Publication year: 2017

Pages: 623-653

Journal: The Journal of Industrial Economics

Volume number: 65

Issue number: 3

ISSN: 0022-1821

eISSN: 1467-6451

DOI Link: https://doi.org/10.1111/joie.12143

Publisher: Wiley

Abstract: 
Collusion has often been alleged in industries where long-lived capacity investments are important. This article develops a computational duopoly model with capacity investments, demand shocks and either competitive or collusive pricing. It shows that allowing for endogenous capacity investments can sometimes make collusion less valuable than competition and that it can change the normal relationships between the profitability of collusion and both the discount rate and industry-wide demand shocks.

Harvard Citation style: Paha, J. (2017) The Value of Collusion with Endogenous Capacity and Demand Uncertainty, The Journal of Industrial Economics, 65(3), pp. 623-653. https://doi.org/10.1111/joie.12143

APA Citation style: Paha, J. (2017). The Value of Collusion with Endogenous Capacity and Demand Uncertainty. The Journal of Industrial Economics. 65(3), 623-653. https://doi.org/10.1111/joie.12143