Collusion under yardstick competition: An experimental study
AbstractThe effectiveness of relative performance evaluation schemes, such as yardstick competition, can be undermined by collusion.The degree to which the regulated agents manage to collude will be affected by the particulars of the scheme.We hypothesize that in a repeated game setting schemes will be more prone to collusion the smaller are the rents to the agents in case they behave non-cooperatively.We illustrate the relevance of this hypothesis by means of an economic experiment in which we compare the efficiency of two performance evaluation schemes.
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Bibliographic InfoPaper provided by Tilburg University in its series Open Access publications from Tilburg University with number urn:nbn:nl:ui:12-141666.
Date of creation: 2004
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Publication status: Published in International Journal of Industrial Organization (2004) v.22, p.1017-1038
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Other versions of this item:
- Potters, Jan & Rockenbach, Bettina & Sadrieh, Abdolkarim & van Damme, Eric, 2004. "Collusion under yardstick competition: an experimental study," International Journal of Industrial Organization, Elsevier, vol. 22(7), pages 1017-1038, September.
- Potters, J.J.M. & Rockenbach, B. & Sadrieh, A. & Damme, E.E.C. van, 2003. "Collusion under Yardstick Competition: An Experimental Study," Discussion Paper 2003-97, Tilburg University, Center for Economic Research.
- Damme, E.E.C. van & Potters, J.J.M. & Rockenbach, B. & Sadrieh, A., 2003. "Collusion under Yardstick Competition: An Experimental Study," Discussion Paper 2003-009, Tilburg University, Tilburg Law and Economic Center.
- C9 - Mathematical and Quantitative Methods - - Design of Experiments
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
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