Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments April 2005 erstellt
Description:
We re-examine tacit collusion under a simple punishment rule in which firms match any lower price by their rivals, but otherwise leave their prices unchanged. We provide conditions under which this simple rule sustains collusion and is credible. Provided competition is imperfect, collusion can always be sustained, but never to the point of monopoly. Interestingly, the standard ambiguous relationship between product substitutability and tacit collusion is unambiguous under this new setting. The relationship to existing theories of price matching guarantees, kinked demand curves, and continuous reaction-function equilibria are explained