Tuesday, October 23, 2018

An Experimental Analysis of the Complications in Colluding when Firms are Asymmetric

Charles F. Mason proposes An Experimental Analysis of the Complications in Colluding when Firms are Asymmetric.

ABSTRACT: I study an indefinitely repeated game where firms differ in size. Attempts to form cartels in such an environment, for example by rationing outputs in a manner linked to firm size differences, have generally struggled. Any successful cartel has to set production shares in a manner that ensures no firm will defect. But this can require allocating sellers disproportionate shares, which in turn makes these tacit agreements difficult to create and enforce. I analyze some experimental evidence in support of this last proposition.

https://lawprofessors.typepad.com/antitrustprof_blog/2018/10/an-experimental-analysis-of-the-complications-in-colluding-when-firms-are-asymmetric.html

| Permalink

Comments

Post a comment