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- W2231551803 abstract "This paper analyzes how the stability of the tacit cooperation within a fringe of sev-eral identical ?rms is a¤ected by the presence of a more e¢ cient ?rm which does not take partin their cooperative agreement. The model assumes that the ?rms of the fringe adopt ?stick andcarrot?strategies a la Abreu (1986, 1988) to support cooperation, while the outside ?rm plays itsone-period best response function to these strategies, regardless of the history of play. Assuminga linear demand function and constant marginal costs, we then obtain conditions for the coopera-tion within the fringe to be sustainable and focus on the most cooperative symmetric punishment(MCSP) that sustains cooperation. We show that the MCSP is harsher when the number of ?rmsinvolved in the agreement is relatively large or when their relative cost disadvantage is relativelysmall. However, both a larger number of ?rms and a larger cost disadvantage make it more di¢ cultto sustain the cooperation." @default.
- W2231551803 created "2016-06-24" @default.
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- W2231551803 date "2012-08-01" @default.
- W2231551803 modified "2023-09-27" @default.
- W2231551803 title "Cooperation in the Presence of an Advantaged Outsider" @default.
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