Correia-da-Silva, João; Pinho, Joana; Vasconcelos, Hélder - Faculdade de Economia, Universidade do Porto - 2013
We study sustainability of collusion with optimal penal codes, in markets where demand growth may trigger the entry of … a new firm. In contrast with grim trigger strategies, optimal penal codes make collusion easier to sustain before entry … than after. We compare different reactions of the incumbents to entry in terms of: sustainability of collusion, incumbent …