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Competition as a Socially Desirable Dilemma

Author

Listed:
  • Christoph Engel

    (Max Planck Institute for Research on Collective Goods, Bonn)

Abstract

A cartel is socially not desirable. But is it a normative problem? And has merger control reason to be concerned about tacit collusion? Neither is evident once one has seen that the members of a cartel face a problem of strategic interaction. It is routinely analysed in terms of game theory. Much less frequently, however, an obvious parallel is drawn. For cartel members, the formation of the cartel and cartel discipline are a public good. Making the parallel explicit is elucidating both at the theoretical and at the experimental levels. The paper contrasts oligopoly theory with public goods theory, and oligopoly experiments with public goods experiments.

Suggested Citation

  • Christoph Engel, 2006. "Competition as a Socially Desirable Dilemma," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2006_12, Max Planck Institute for Research on Collective Goods.
  • Handle: RePEc:mpg:wpaper:2006_12
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    File URL: http://www.coll.mpg.de/pdf_dat/2006_12online.pdf
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    Cited by:

    1. Oliver Budzinski, 2009. "Modern Industrial Economics and Competition Policy: Open Problems and Possible Limits," Working Papers 93/09, University of Southern Denmark, Department of Sociology, Environmental and Business Economics.

    More about this item

    Keywords

    Oligopoly; Public Good; Experiment;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices

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