This paper analyzes the incentive for a cartel agreement between hospitals. For this purpose we extend a quality competition model developed by Montefiori (2005). We investigate that collusion on a low provided quality level will lead to higher profits for both hospitals. Therefore both...

This paper develops a spatial model to analyze the stability of a market sharing agreement between two firms. We find that the stability of the cartel depends on the relative market size of each firm. Collusion is not attractive for firms with a small home market, but the incentive for collusion...