Cooperation without coordination: signaling, types and tacit collusion in laboratory oligopolies
AbstractWe study the effects of price signaling activity and underlying propensities to cooperate on tacit collusion in posted offer markets. The primary experiment consists of an extensively repeated baseline sequence and a 'forecast' sequence that adds to the baseline a forecasting game that allows identification of signaling intentions. Forecast sequence results indicate that signaling intentions considerably exceed those that are counted under a standard signal measure based on previous period prices. Nevertheless, we find essentially no correlation between either measure of signal volumes and collusive efficiency. A second experiment demonstrates that underlying seller propensities to cooperate more clearly affect collusiveness.
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Bibliographic InfoArticle provided by Springer in its journal Experimental Economics.
Volume (Year): 13 (2010)
Issue (Month): 1 (March)
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Web page: http://www.springerlink.com/link.asp?id=102888
Experiments; Tacit collusion; Price signaling; Types; C9; L11; L13;
Other versions of this item:
- Douglas D. Davis & Korenok Oleg & Robert Reilly, 2007. "Cooperation without Coordination: Signaling, Types and Tacit Collusion in Laboratory Oligopolies," Working Papers 0702, VCU School of Business, Department of Economics, revised Sep 2009.
- C9 - Mathematical and Quantitative Methods - - Design of Experiments
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
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