Article ID Journal Published Year Pages File Type
5062739 Economics Letters 2006 6 Pages PDF
Abstract
We investigate, within a Cournot supergame, whether optimal punishments may become suboptimal when economies of scale are not negligible. We show that, for sufficiently strong increasing returns to scale, the critical discount factor associated to grim trigger strategies is lower than the one associated to optimal penal codes.
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Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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The suboptimality of optimal punishments in Cournot supergames
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