A proposed mechanism for cartel destabilization

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dc.contributor.MentorQuesada, Lucía
dc.creator.AutorCastellini, Lucas
dc.date.accessioned2026-04-16T19:07:14Z
dc.date.available2026-04-16T19:07:14Z
dc.date.issued2026-03
dc.descriptionFil: Castellini, Lucas. Universidad de San Andrés. Departamento de Economía; Argentina.
dc.description.abstractThis thesis studies whether a targeted demand-side subsidy could potentially destabilize pricefixing cartels. I analyze a repeated-game framework in which homogeneous firms collude by setting a price, and the Government introduces a subsidy reimbursing consumers for purchases from a single cartel member, financed with taxes. I show that, under restrictive assumptions, the subsidy raises the minimum discount factor required to sustain collusion relative to the nosubsidy benchmark, by increasing the subsidized firm's benefits from deviation. In a lineardemand model without production costs and no public-funding inefficiencies, the subsidy can induce cartel breakdown while being welfare-enhancing in the long run by achieving Bertrand competition. I then extend the analysis to account for costly public funds and positive production costs. These extensions restrict the range of discount factors under which the subsidy is socially profitable and effective. The results highlight a potential channel that may influence cartel stability, conditional on restrictive economic assumptions.
dc.formatapplication/pdf
dc.identifier.urihttps://repositorio.udesa.edu.ar/handle/10908/26384
dc.languageeng
dc.publisherUniversidad de San Andrés. Departamento de Economía
dc.rightsinfo:eu-repo/semantics/openAccess
dc.rightshttps://creativecommons.org/licenses/by-nc-nd/4.0/
dc.titleA proposed mechanism for cartel destabilization
dc.typeTesis
dc.typeinfo:eu-repo/semantics/masterThesis
dc.typeinfo:ar-repo/semantics/tesis de maestría
dc.typeinfo:eu-repo/semantics/updatedVersion
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