The Impact of Cyclical Demand Movements on Collusive Behavior
构建模型分析商业周期中需求波动如何影响企业合谋定价，发现衰退期比繁荣期更难维持合谋，且需求下降时价格更低。
Recent work by Rotemberg and Saloner (1986) investigates the effect of the business cycle on optimal collusive pricing by specifying that demand is subject to i.i.d. shocks. An implication of the i.i.d. assumption is that firms' expectations on future demand are unrelated to the current level of demand. We put forth a model that allows for both the level of current demand and firms' expectations on future demand to change over time; thus it captures two important properties of the business cycle. Our analysis reveals that while the gain to deviating from a collusive agreement is greatest during booms, firms find it most difficult to collude during recessions, as the forgone profits from inducing a price war are relatively low. An implication of this effect for pricing behavior is that at the same level of demand, price is lower when demand is declining than when demand is rising. Consistent with previous theoretical work, we find that firms price countercyclically for a range of values for the discount factor. However, numerical simulations reveal a greater tendency for firms to price countercyclically during recessions than during booms.