Research Papers in Economics, Department of Economics, Stockholm University
Does Collusion without Communication Exist?
() and Roger Pyddoke
Abstract: Tacit cartels did not arise in experimental triopoly
markets even with the help of detailed instructions to prospective cartel
members on how to coordinate actions. In duopoly markets tacit cartels were
successful, with winning bids and supporting "pass" bids increasing
gradually. A simulated third bidder, entering whit known probability,
prevented the buildup of cartel prices in duopoly markets. We suggest that
support for each other. In markets with more than two sellers the inability
to communicate appears to prevent the creation of mutual trust.
Keywords: Tacit collusion; laboratory experiment; (follow links to similar papers)
JEL-Codes: C91; L41; (follow links to similar papers)
15 pages, July 14, 1999
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