The Econometric SocietyEdited by: Guido W. Imbens • Print ISSN: 0012-9682 • Online ISSN: 1468-0262
August 15, 2022
Econometrica: Jan, 1984, Volume 52, Issue 1
https://doi.org/0012-9682(198401)52:1<87:NCUIPI>2.0.CO;2-6
p. 87-100
Edward J. Green, Robert H. Porter
Recent work in game theory has shown that, in principle, it may be possible for firms in an industry to form a self-policing cartel to maximize their joint profits. This paper examines the nature of cartel self-enforcement in the presence of demand uncertainty. A model of a noncooperatively supported cartel is presented, and the aspects of industry structure which would make such a cartel viable are discussed.
