Collusion sustainability depends on firms' ability to impose sufficiently severe punishments in the event of deviation from the collusive rule. We extend results from the literature on optimal collusion by investigating the role of a limited liability constraint. We examine all situations in...

This note extends the characterization of simultaneous investment (tacit collusion) equilibria in Boyer, Lasserre and Moreaux (2012). Tacit collusion equilibria may or may not exist, and when they do may involve either finite time investments (type 1) or infinite delay (type 2). The relationship...

Overlapping ownership has contrasting effects on capacity investments if duopoly firms invest sequentially. The follower’s reaction is less aggressive, but the leader acts more aggressively, either by choosing larger capacities or by shifting from accommodation to deterrence. If it shifts the...

We study how overlapping ownership affects the timing and size of capacity investments in duopoly. In addition to standard accommodation and delay strategies, internalization allows a leader to block follower entry. Follower timing and capacity reactions are less aggressive, making outcomes less...

There is evidence that competing firms outsource R&D to the same independent for-profit laboratory. We draw on this stylized fact to construct a model where two firms in the same industry offer transfer payments in exchange for user-specific R&D services from a common laboratory. Inter-firm and...