Using trigger strategies to share the monopoly profit

Reference no: EM13197928

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.

Reference no: EM13197928

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