| Popis: |
A game-theoretic model is presented analyzing collusive non-investment. Firms decide whether to replace present production with an alternative that is improving over time. If both firms replace old with new, both will have invested without obtaining a sustainable competitive advantage; hence, there may be a reason to collusively not invest. Such collusion is shown to be more likely feasible when the alternate technology is rapidly improving. An example of such collusion is presented. It is also illustrated that, during Japan's 1950s–1970s rapid development, the necessary conditions for successful collusive non-investment existed for participants in Japanese government-sponsored cartels. |
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