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Strategy Revision Opportunities and Collusion

Author

Listed:
  • Matthew Embrey

    (University of Sussex)

  • Friederike Mengel

    (University of Essex and Maastricht University)

  • Ronald Peeters

    (Maastricht University)

Abstract

This paper studies whether and how strategy revision opportunities affect levels of collusion in indefinitely repeated two-player games. Consistent with standard theory, we find that such opportunities do not affect strategy choices, or collusion levels, if the game is of strategic substitutes. In contrast, there is a strong and positive effect for games of strategic complements. Revision opportunities lead to more collusion. We discuss alternative explanations for this result.

Suggested Citation

  • Matthew Embrey & Friederike Mengel & Ronald Peeters, 2016. "Strategy Revision Opportunities and Collusion," Working Paper Series 08716, Department of Economics, University of Sussex Business School.
    • Handle: RePEc:sus:susewp:08716
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    File URL: http://www.sussex.ac.uk/economics/documents/wps-87-2016.pdf
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    References listed on IDEAS

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    Cited by:

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    2. Cason, Timothy N. & Mui, Vai-Lam, 2019. "Individual versus group choices of repeated game strategies: A strategy method approach," Games and Economic Behavior, Elsevier, vol. 114(C), pages 128-145.
    3. Mengel, Friederike & Orlandi, Ludovica & Weidenholzer, Simon, 2022. "Match length realization and cooperation in indefinitely repeated games," Journal of Economic Theory, Elsevier, vol. 200(C).

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    More about this item

    Keywords

    strategy revision opportunities; cooperation; repeated games; complements vs. substitutes;
    All these keywords.

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection

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