Sugata Marjit , Arijit Mukherjee , Xinpeng Xu , Lei Yang
{"title":"Finance and collusion in oligopolistic markets","authors":"Sugata Marjit , Arijit Mukherjee , Xinpeng Xu , Lei Yang","doi":"10.1016/j.najef.2024.102351","DOIUrl":null,"url":null,"abstract":"<div><div>We explore how financial constraints affect the sustainability of product market collusion in a bank-financed oligopoly, where firms operate within an imperfect credit market. Our analysis uncovers a non-monotonic relationship between the sustainability of collusion and the level of financial constraints, using a general demand function. Notably, collusion tends to be more sustainable when firms experience low to moderate financial constraints, as opposed to having no financial constraints at all. However, when firms are under complete financial constraints, the sustainability of collusion may decrease compared to situations without financial constraints. These findings hold true for both Cournot and Bertrand competition models in the product market.</div></div>","PeriodicalId":47831,"journal":{"name":"North American Journal of Economics and Finance","volume":"76 ","pages":"Article 102351"},"PeriodicalIF":3.9000,"publicationDate":"2025-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"North American Journal of Economics and Finance","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S1062940824002766","RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"2024/12/21 0:00:00","PubModel":"Epub","JCR":"Q1","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 0
Abstract
We explore how financial constraints affect the sustainability of product market collusion in a bank-financed oligopoly, where firms operate within an imperfect credit market. Our analysis uncovers a non-monotonic relationship between the sustainability of collusion and the level of financial constraints, using a general demand function. Notably, collusion tends to be more sustainable when firms experience low to moderate financial constraints, as opposed to having no financial constraints at all. However, when firms are under complete financial constraints, the sustainability of collusion may decrease compared to situations without financial constraints. These findings hold true for both Cournot and Bertrand competition models in the product market.
期刊介绍：
The focus of the North-American Journal of Economics and Finance is on the economics of integration of goods, services, financial markets, at both regional and global levels with the role of economic policy in that process playing an important role. Both theoretical and empirical papers are welcome. Empirical and policy-related papers that rely on data and the experiences of countries outside North America are also welcome. Papers should offer concrete lessons about the ongoing process of globalization, or policy implications about how governments, domestic or international institutions, can improve the coordination of their activities. Empirical analysis should be capable of replication. Authors of accepted papers will be encouraged to supply data and computer programs.
京公网安备 11010802042870号
京ICP备2023020795号-1
分享
求助内容：
应助结果提醒方式：
扫码关注我们
