ABSTRACT
Cartel behaviour and mergers, together with several other forms of anti-competitive behaviour, such as the abuse of dominant position, are the core objects of the attention of anti-trust laws and agencies since the adoption of the Sherman Act in the USA, in 1890. The rise of implicit collusion in repeated games has received a large amount of attention in oligopoly theory, entering textbooks very early in the development of the theory of Industrial Organization. Stock-based managerial compensation makes any given level of collusion easier to sustain than under pure profit-maximizing behaviour. The main body of this subset of the IO literature deals with implicit cartel behaviour, either in prices or in quantities, among firms interested in increasing profits as compared to those generated by the Nash equilibrium of the one-shot game. The Vickers model is an obvious candidate to be used for the analysis of the stability of implicit collusion among managerial firms.
