Collusion when players take turns

Corchón, Luis Carlos; Correa-Lopera, Guadalupe; Moreno, Bernardo

doi:10.1016/j.econlet.2026.112918

1-s2.0-S0165176526001126-main.pdf (665.2Kb)

Identificadores

URI: https://hdl.handle.net/10481/111987

DOI: 10.1016/j.econlet.2026.112918

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Editorial

Elsevier

Materia

Collusion

Folk theorem

Taking turns

Fecha

2026-05

Referencia bibliográfica

Corchón, L. C., Correa-Lopera, G., & Moreno, B. (2026). Collusion when players take turns. Economics Letters, 263(112918), 112918. https://doi.org/10.1016/j.econlet.2026.112918

Patrocinador

MICIU/AEI/10.13039/501100011033 - (CEX2021-001181-M) (PID2023-151783NB-I00); MCIN/AEI/10.13039/501100011033/FEDER, UE - (PID2022-138774NB-I00) (PID2023-147391NB-I00); PAIDI Research Groups Program - (PPRO-SEJ426-G-2023)

Resumen

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.

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