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Respond to the question: Expanding or declining markets?

02/20/2003 10:25 AM by Risclover; Expanding or declining markets

I would like you to consider a repeated Bertrand framework
with n ≥ 2 firms. The common discount factor is δ < 1, and the firms have constant marginal costs c. The market demand at time t is qt = µtD(pt), where µδ < 1 and pt is the lowest price charged.
Now, the question is how to derive the set of discount factors such that full collusion (sharing of the
monopoly profits) is sustainable as an equilibrium of the infinitely repeated game?

I'd appreciate your inputs.

Best regards

Risclover [Manage messages]