This paper investigates the effects on tacit collusion of increased market transparency on the consumer side as well as on the producer side of a market. Increasing market transparency on the consumer side, increases the benefits to a firm from undercutting the collusive price. It also decreases the punishment profit (whether the punishment is Nash-reversion or optimal punishment). The net effect is that collusion becomes harder to sustain. Increasing market transparency on the producer side facilitates collusion. When transparency is increased on both sides, the net effect is that collusion becomes harder to sustain.
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Paper provided by University of Copenhagen. Department of Economics. Centre for Industrial Economics in its series CIE Discussion Papers with number
2001-04.
Find related papers by JEL classification: L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
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