@article{59bdcd97a9a34c20b362c2894f5b12f1,
title = "The profit-sharing rule that maximizes sustainability of cartel agreements",
abstract = "We study the profit-sharing rule that maximizes the sustainability of cartel agreements when firms can make side-payments. This rule is such that the critical discount factor is the same for all firms ({"}balanced temptation{"}). If a cartel applies this rule, contrarily to the typical finding in the literature, asymmetries among firms may increase the sustainability of the cartel. In an illustrating example of a Cournot duopoly with asymmetric production costs, the sustainability of collusion is maximal when firms are extremely asymmetric.",
keywords = "Asymmetric firms, Balanced temptation, Collusion, Critical discount factor, Side-payments",
author = "Jo{\~a}o Correia-da-Silva and Joana Pinho",
note = "Funding Information: two anonymous referees for their useful comments and suggestions which allowed us to improve this paper. We acknowledge financial support from FEDER through COMPETE and from Portuguese Public Funds through Funda¸c{\~a}o para a Ci{\^e}ncia e a Tecnologia (FCT) in the framework of projects PTDC/IIM-ECO/5294/2012 and PEst-OE/EGE/UI4105/2014. Jo{\~a}o Correia-da-Silva acknowledges financial support from the European Commission through the Marie Sklodowska Curie fellowship H2020-MSCA-IF-2014-657283. Joana Pinho acknowledges financial support from FCT through the post-doctoral scholarship SFRH/BPD/79535/2011. Funding Information: We thank Joana Resende (Editor of this Special Issue) and two anonymous referees for their useful comments and suggestions which allowed us to improve this paper. We acknowledge financial support from FEDER through COMPETE and from Portuguese Public Funds through Funda{\c c}{\~a}o para a Ci{\^e}ncia e a Tecnologia (FCT) in the framework of projects PTDC/IIM-ECO/5294/2012 and PEst-OE/EGE/UI4105/2014. Jo{\~a}o Correia-da-Silva acknowledges financial support from the European Commission through the Marie Sklodowska Curie fellowship H2020-MSCA-IF-2014-657283. Joana Pinho acknowledges financial support from FCT through the post-doctoral scholarship SFRH/BPD/79535/2011. Publisher Copyright: {\textcopyright} 2016, American Institute of Mathematical Sciences.",
year = "2016",
month = apr,
doi = "10.3934/jdg.2016007",
language = "English",
volume = "3",
pages = "143--151",
journal = "Journal of Dynamics and Games",
issn = "2164-6074",
publisher = "American Institute of Mathematical Sciences",
number = "2",
}
