Abstract
In this paper we show that the increasing marginal cost assumption removes the infeasibility of market structurealteration that is present under the constant marginal cost assumption. Specifically, in an infinitely repeated game withincreasing marginal cost, we show that technological improvement has the potential to switch the market structurefrom collusion to Cournot generating additional welfare gains.
| Original language | English |
|---|---|
| Pages (from-to) | 1106-1112 |
| Number of pages | 7 |
| Journal | Economics Bulletin |
| Volume | 37 |
| Issue number | 2 |
| Publication status | Published - 2017 |