The Library
Collusion in Bertrand versus Cournot competition : a virtual bargaining approach
Tools
Melkonyan, Tigran A., Zeitoun, Hossam and Chater, Nick (2018) Collusion in Bertrand versus Cournot competition : a virtual bargaining approach. Management Science, 64 (12). pp. 5599-5609. doi:10.1287/mnsc.2017.2878 ISSN 0025-1909.
|
PDF
WRAP-collusion-competition-virtual-approach-Melkonyan-2017.pdf - Unspecified Version - Requires a PDF viewer. Download (635Kb) | Preview |
|
PDF
WRAP-collusion-Bertrand-Cournot-competition-Virtual-bargaining-approach-Melkonyan-Zeitoun-Chater-2017-updated.pdf - Accepted Version Embargoed item. Restricted access to Repository staff only - Requires a PDF viewer. Download (1886Kb) |
||
PDF
WRAP-collusion-Bertrand-Cournot-competition-Virtual-bargaining-approach-Melkonyan-Zeitoun-Chater-2017.pdf - Accepted Version Embargoed item. Restricted access to Repository staff only - Requires a PDF viewer. Download (1885Kb) |
||
PDF (Permissions email)
permissions_request_INFORMS_20_8_2017.pdf.pdf - Other Embargoed item. Restricted access to Repository staff only - Requires a PDF viewer. Download (118Kb) |
||
PDF (publisher's acceptance letter)
acceptance_letter_Manuscript_MS-16-02479_R3.pdf - Other Embargoed item. Restricted access to Repository staff only - Requires a PDF viewer. Download (36Kb) |
Official URL: https://doi.org/10.1287/mnsc.2017.2878
Abstract
How do firms manage to collude without communicating? Why do we find more collusion in price competition than in quantity competition? Why is collusion so hard to detect? We examine strategic behavior in competitive interactions by developing and applying the concept of virtual bargaining. When decision makers virtually bargain, they mentally simulate, and choose among, agreements that they could reach if they were able to explicitly negotiate with each other. Virtual bargainers focus on agreements that offer some protection against the possibility that their counterparts may deviate and best-respond to these agreements. We develop a formal account of virtual bargaining and demonstrate that it leads to collusion in Bertrand, but not in Cournot competition. In this framework, collusion is a result of virtual bargaining as a mode of reasoning and requires neither communication nor dynamic considerations, such as rewards and punishments, between the players.
Item Type: | Journal Article | ||||||||
---|---|---|---|---|---|---|---|---|---|
Subjects: | H Social Sciences > HF Commerce | ||||||||
Divisions: | Faculty of Social Sciences > Warwick Business School > Behavioural Science Faculty of Social Sciences > Warwick Business School |
||||||||
Library of Congress Subject Headings (LCSH): | Price fixing -- Mathematical models | ||||||||
Journal or Publication Title: | Management Science | ||||||||
Publisher: | Institute for Operations Research and the Management Sciences (I N F O R M S) | ||||||||
ISSN: | 0025-1909 | ||||||||
Official Date: | 2018 | ||||||||
Dates: |
|
||||||||
Volume: | 64 | ||||||||
Number: | 12 | ||||||||
Page Range: | pp. 5599-5609 | ||||||||
DOI: | 10.1287/mnsc.2017.2878 | ||||||||
Status: | Peer Reviewed | ||||||||
Publication Status: | Published | ||||||||
Access rights to Published version: | Open Access (Creative Commons) | ||||||||
Date of first compliant deposit: | 18 June 2017 | ||||||||
Date of first compliant Open Access: | 29 August 2017 | ||||||||
Funder: | European Research Council (ERC), Economic and Social Research Council (Great Britain) (ESRC), Leverhulme Trust (LT), Research Councils UK (RCUK) | ||||||||
Grant number: | Grant 295917 - RATIONALITY (ERC), ES/K002201/1 (ESRC), RP2012-V-022 (LT), EP/K039830/1 (RCUK) |
Request changes or add full text files to a record
Repository staff actions (login required)
View Item |