Excess Capacity, Sunk Costs and Collusion: A Non-Cooperative Bargaining Game

Michele Grillo; D. Cossutta

Excess Capacity, Sunk Costs and Collusion: A Non-Cooperative Bargaining Game

Michele Grillo, D. Cossutta

Università Cattolica del Sacro Cuore

Research output: Contribution to journal › Article › peer-review

6 Citations (Scopus)

Abstract

The paper models competition among firms which operate at excess capacity as a non-cooperative bargaining game. It is shown that, provided sunk costs are sufficiently high, collusion among firms will ensue. This result has been employed to provide a non traditional interpretation of both price and non-price competition in the European car market in recent years

Original language	English
Pages (from-to)	251-270
Number of pages	20
Journal	International Journal of Industrial Organization
Publication status	Published - 1986

Keywords

collusion
sunk costs

Cite this

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abstract = "The paper models competition among firms which operate at excess capacity as a non-cooperative bargaining game. It is shown that, provided sunk costs are sufficiently high, collusion among firms will ensue. This result has been employed to provide a non traditional interpretation of both price and non-price competition in the European car market in recent years",

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AB - The paper models competition among firms which operate at excess capacity as a non-cooperative bargaining game. It is shown that, provided sunk costs are sufficiently high, collusion among firms will ensue. This result has been employed to provide a non traditional interpretation of both price and non-price competition in the European car market in recent years

KW - collusion

KW - sunk costs

KW - collusion

KW - sunk costs

UR - http://hdl.handle.net/10807/27125

M3 - Article

SN - 0167-7187

SP - 251

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JO - International Journal of Industrial Organization

JF - International Journal of Industrial Organization

ER -

Excess Capacity, Sunk Costs and Collusion: A Non-Cooperative Bargaining Game

Abstract

Keywords

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