TY - JOUR
T1 - Noncooperative collusion in durable goods oligopoly
AU - Gul, Faruk
N1 - Publisher Copyright:
© 1987 Wiley-Blackwell Publishing, Inc.. All rights reserved.
Copyright:
Copyright 2019 Elsevier B.V., All rights reserved.
PY - 1987
Y1 - 1987
N2 - Coase conjectured that a durable-goods monopolist who can make offers to sell arbitrarily frequently will lose the ability to extract positive profits. This result, which has now been proved, can be attributed to the inability of the monopolist to commit to maintaining sufficiently high prices in the near future. For the case of durable-goods oligopoly, we show that letting the firms make offers arbitrarily frequently enhances their ability to commit to high prices and in the limit enables the firms to enjoy total market profits equal to the full commitment (one-shot) monopoly profit.
AB - Coase conjectured that a durable-goods monopolist who can make offers to sell arbitrarily frequently will lose the ability to extract positive profits. This result, which has now been proved, can be attributed to the inability of the monopolist to commit to maintaining sufficiently high prices in the near future. For the case of durable-goods oligopoly, we show that letting the firms make offers arbitrarily frequently enhances their ability to commit to high prices and in the limit enables the firms to enjoy total market profits equal to the full commitment (one-shot) monopoly profit.
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U2 - 10.2307/2555550
DO - 10.2307/2555550
M3 - Article
AN - SCOPUS:0009987011
VL - 18
SP - 248
EP - 254
JO - RAND Journal of Economics
JF - RAND Journal of Economics
SN - 0741-6261
IS - 2
ER -