Collusion/Cartel (Varian 28.10)

This clips explains mathematically why a cartel is typically unstable, unless there exist punishment strategies.
NOTE: there is a typo at the bottom line! It should be P(y1+y2)+ (partial P/partial y1)y1 -MC(y1). I missed the y1 in the second term. Sorry!

[@ProttutponnomotiOfficial]

Your explanations really make the concept very clear! Thank you for your contribution.

[@IrisFranz]

Glad that it was helpful!

[@lingey8103]

hi, there! I am kind of confused about the last line. Should there be y1 times partial p partial y1 by the chain rule?