Share the monopoly profit using trigger strategies

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Reference no: EM131071458

Consider an infinitely repeated Cournot duopoly with discount factor δ <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,δ , for which the two firms could successfully collude over the monopoly output and hence share the monopoly profit using trigger strategies.

Reference no: EM131071458

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