Optimal cartel equilibria with imperfect monitoring (Q1085032): Difference between revisions

There exist optimal symmetric equilibria in the Green-Porter model [see \textit{E. J. Green} and \textit{R. H. Porter}, Econometrica 52, 87-100 (1984; Zbl 0526.90013) and \textit{R. H. Porter}, J. Econ. Theory 29, 313-338 (1983; Zbl 0511.90020)] having an elementary intertemporal structure. Such an equilibrium is described entirely by two subsets of price space and two quantities, the only production levels used by firms in any contingency. The central technique employed in the analysis is the reduction of the repeated game to a family of static games.