2 What are the properties of a collusive outcome?(How Do Cartels Operate?)(cartel price fixing and market shares)
From: Foundations and Trends in Microeconomics
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Date: 7/1/2006
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Author: Harrington, Joseph E., Jr.
Of the cartels reviewed, the canonical collusive outcome is characterized by an agreement in both price and the allocation of supply across cartel members. Let me briefly summarize some of the findings of this section. In Section 2.1, I discuss agreement with respect to price. In all cartels, firms had common prices. When the product was homogeneous--such as vitamins or gases--this was a straightforward exercise. When there was a wide array of feasible products, the cartel would ...
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