Economics 1st Edition by Dean Karlan,Jonathan Morduch

تمرين 16

Isabella runs an IT solutions business for her college peers and has only one competitor, Franco. Isabella and Franco have decided to collude and provide monopoly-level output. Given that they are both freshmen and intend to run their businesses for the next three years, is this agreement sustainable? Would your answer change if Franco knew he planned to transfer to another college next year?