CEU Electronic Theses and Dissertations, 2020
| Author | Aman, Argun |
|---|---|
| Title | A Model Of Pre-Emption Over The Business Cycle |
| Summary | I present a model of pre-emptive collusion over the business cycle. By introducing competitive fringe into Markov-driven demand cycles, I characterize preemptive and non-pre-emptive equilibria. I show that under pro-cyclical, most-collusive prices, colluding firms can deter entry from less efficient firms in the boom periods. I also show that pre-emptive strategies cannot constitute equilibria when there are less than two incumbent firms. This further means that imperfectly colluding firms have better deterrence capabilities than oligopolies. The reason is that that pre-emption can only work through trigger strategies, a tool that is not credible for an oligopoly. |
| Supervisor | Lychagin, Sergey |
| Department | Economics MA |
| Full text | https://www.etd.ceu.edu/2020/aman_argun.pdf |
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