Collusion Enforcement with Private Information and Private Monitoring
Jimmy Chan, Wenzhang Zhang*
Date: 2012-05-05 2:30 pm – 3:00 pm
Last modified: 2012-04-20
Abstract
This paper describes how a cartel may enforce a collusive agreement even when it does not observe any of the prices, sales, and costs of the firms. The underlying mechanism applies to both price and quantity competition, allows a wide class of stochastic demand systems, and can be generalized to the case of multi-market collusion.