Collusion without communication

Publisher's full text
Astri Muren

We study tacit collusion by investigating experimentally the effect of explicit instructions on how to coordinate prices. We find:

  1. no tacit collusion in triopoly markets even with explicit instructions on how to coordinate
  2. increased tacit collusion with explicit instructions in duopoly markets.

The results suggest that there are additional factors than the difficulty of finding a collusive pricing scheme, that effectively limit tacit collusion.

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