Collusion when players take turns

B. Moreno, L. C. Corchón, G. Correa

We present a model of two players who take turns to facilitate collusion. One of the players wins (contract, office), while the other loses by presenting a ludicrous proposal or no proposal at all. Assuming that players use grim trigger strategies, we show that it is possible to sustain agreements as a Subgame Perfect Nash Equilibrium a) for a range of discount factors below one but above zero and b) for two disjoint intervals
of the discount factor.

Keywords: Collusion Folk Theorem Taking Turns

G. Bergantiños, A. Navarro Ramos

M. Domènech Blàzquez, J. M. Giménez Pradales, M. A. Puente del Campo

E. Molis, O. Gallo