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August 27, 2014

Homework Help: Economics

Posted by Brian on Wednesday, May 23, 2012 at 9:29am.

Consider an infinitely repeated Cournot duopoly with discount factor delta <1, unit costs of c>0, and inverse demand
functions p(Q)=a-bQ, with a>c and b>0. Find the condition on the discount factor,delta , for which the two firms could
successfully collude over the monopoly output and hence share the monopoly profit using trigger strategies.

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