Sustaining collusion under economic integration

Luca Colombo, Paola Labrecciosa

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2 Citations (Scopus)

Abstract

In this paper, we aim at investigating from a game-theory perspective whether trade liberalization can promote a collusive two-way trade. We show that, under Cournot competition, economic integration is anti-competitive if collusive trade is a possible outcome of the repeated game; under price competition, the likelihood of collusive trade is a necessary but not sufficient condition for trade liberalization to be pro-competitive. Furthermore, we show that economic integration may increase the scope for collusion irrespective of the firms strategic variable
Original languageEnglish
Pages (from-to)905 - 915
Number of pages11
JournalReview of International Economics
Volume15
Issue number5
DOIs
Publication statusPublished - 2007
Externally publishedYes

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