Collusion and Price Rigidity

摘要: We consider an inÞnitely repeated Bertrand game, in which prices are publicly observed and each Þrm receives a privately observed, i.i.d. cost shock period. focus on symmetric perfect public equilibria (SPPE), wherein any “punishments” borne equally by all Þrms. identify tradeoff that is associated with collusive pricing schemes the price to be charged strictly increasing its level: such “fully sorting” offer efficiency beneÞts, as they ensure lowest-cost makes current sale, but also imply informational (distorted and/or equilibrium-path wars), since higher-cost must deterred from mimicking lower-cost charging lower price. A rigid-pricing scheme, where Þrm’s independent of position, sacriÞces beneÞts diminishes cost. For wide range settings, optimal scheme requires (i). absence wars (ii). rigid If Þrms sufficiently impatient, however, cannot enforced, may distorted downward, order diminish incentive cheat. When model modiÞed include demand shocks, downward distortion accompanies realization occur only when high.