Collusion with private and aggregate information

This paper considers three linear asymmetric oligopoly models with (i) a representative consumer, (ii) horizontal differentiation and (iii) vertical differentiation. We show that firms could maximize the joint-profit only based on private and aggregate information. They can choose the “correct“ colluding prices without knowing the demand or profit function. The collusive outcome is a natural focal point despite firms are asymmetric. Collusion can be incentive compatible even though individual actions (prices) are not observed.