3. Cartel Stability

Assigned Reading

Packet: "The Kleit Oligopoly Game"

Central Idea: It's tough enforcing collusion without binding agreements, but communication helps.

Antithesis: Without antitrust laws, all firms will charge the monopoly price.

Topics That Might be Discussed in Class

We will do the Kleit oligopoly experiment in class.

Important Terms: Duopoly, Oligopoly, Collusion, Cartel.

Additional Material

The oligopoly game in latex-ascii and pdf.
A link to Professor Kleit at Penn State.

For Next Time

Thinking Strategically (Avinash Dixit and Barry Nalebuff), Chapter 4, Resolving the Prisoner's Dilemma
Koselka, Rita, ``Businessman's Dilemma: An Interview with Barry Nalebuff,'' Forbes, 11 October 1993, p. 107- 109.

Return to the Thinking Strategically Home Page, at http: //pacioli.bus.indiana.edu/erasmuse/g570/g570.htm. Send comments to Prof. Rasmusen. Last updated: March 14, 2002.