Consider an infinitely repeated Bertrand oligopoly game with dis- count factor < 1. The unit cost of production is a constant c = 0.2 and the same for all n > 2 firms. There are no fixed costs. Describe a form of "trigger" strategies that can facilitate tacit collu- sion in pricing. Determine the condition under which such strategies can sustain the monopoly price in each of the following cases:

Consider an infinitely repeated Bertrand oligopoly game with dis- count factor < 1. The unit cost of production is a constant c = 0.2 and the same for all n > 2 firms. There are no fixed costs. Describe a form of "trigger" strategies that can facilitate tacit collu- sion in pricing. Determine the condition under which such strategies can sustain the monopoly price in each of the following cases:

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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