IDEAS home Printed from https://ideas.repec.org/a/sej/ancoec/v763y2010p577-591.html
   My bibliography  Save this article

Tacit Collusion in Price-Setting Duopoly Markets: Experimental Evidence with Complements and Substitutes

Author

Listed:
  • Lisa R. Anderson

    () (Department of Economics, College of William and Mary, Williamsburg, VA 23187, USA)

  • Beth A. Freeborn

    () (Department of Economics, College of William and Mary, Williamsburg, VA 23187, USA)

  • Charles A. Holt

    () (Department of Economics, University of Virginia, Charlottesville, VA 22904, USA)

Abstract

We study the effect of demand structure on the ability of subjects to tacitly collude on prices by considering Bertrand substitutes and Bertrand complements. We find evidence of collusion in the complements treatment, but no such evidence is found in the substitutes treatment. This finding is somewhat in contrast with a previous study that observes tacit collusion in two treatments with similar underlying demand structures but with no market framing.

Suggested Citation

  • Lisa R. Anderson & Beth A. Freeborn & Charles A. Holt, 2010. "Tacit Collusion in Price-Setting Duopoly Markets: Experimental Evidence with Complements and Substitutes," Southern Economic Journal, Southern Economic Association, vol. 76(3), pages 577-591, January.
  • Handle: RePEc:sej:ancoec:v:76:3:y:2010:p:577-591
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.4284/sej.2010.76.3.577
    Download Restriction: no

    References listed on IDEAS

    as
    1. Saul Estrin, 2002. "Competition and Corporate Governance in Transition," Journal of Economic Perspectives, American Economic Association, vol. 16(1), pages 101-124, Winter.
    2. repec:adr:anecst:y:1996:i:41-42 is not listed on IDEAS
    3. Milan Vodopivec & Peter F. Orazem, 2000. "Male-female differences in labor market outcomes during the early transition to market: The cases of Estonia and Slovenia," Journal of Population Economics, Springer;European Society for Population Economics, vol. 13(2), pages 283-303.
    4. Nauro F. Campos & Abrizio Coricelli, 2002. "Growth in Transition: What We Know, What We Don't, and What We Should," Journal of Economic Literature, American Economic Association, vol. 40(3), pages 793-836, September.
    5. Simeon Djankov & Peter Murrell, 2002. "Enterprise Restructuring in Transition: A Quantitative Survey," Journal of Economic Literature, American Economic Association, pages 739-792.
    6. Nickell, Stephen J, 1996. "Competition and Corporate Performance," Journal of Political Economy, University of Chicago Press, vol. 104(4), pages 724-746, August.
    7. Angrist, Joshua D. & Krueger, Alan B., 1999. "Empirical strategies in labor economics," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 23, pages 1277-1366 Elsevier.
    8. Joskow, Paul L. & Rose, Nancy L., 1989. "The effects of economic regulation," Handbook of Industrial Organization,in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 2, chapter 25, pages 1449-1506 Elsevier.
    9. Vodopivec, MIlan, 1993. "Determination of Earnings in Yugoslav Firms: Can It Be Squared with Labor Management?," Economic Development and Cultural Change, University of Chicago Press, vol. 41(3), pages 623-632, April.
    10. Olivier Blanchard & Michael Kremer, 1997. "Disorganization," The Quarterly Journal of Economics, Oxford University Press, vol. 112(4), pages 1091-1126.
    11. David Blanchflower & Stephen Machin, 1996. "Product Market Competition Wages and Productivity: International Evidence from Establishment-Level Data," Annals of Economics and Statistics, GENES, issue 41-42, pages 219-253.
    12. Jan Svejnar, 2002. "Transition Economies: Performance and Challenges," Journal of Economic Perspectives, American Economic Association, vol. 16(1), pages 3-28, Winter.
    13. repec:adr:anecst:y:1996:i:41-42:p:10 is not listed on IDEAS
    14. Roman Frydman & Cheryl Gray & Marek Hessel & Andrzej Rapaczynski, 1999. "When Does Privatization Work? The Impact of Private Ownership on Corporate Performance in the Transition Economies," The Quarterly Journal of Economics, Oxford University Press, vol. 114(4), pages 1153-1191.
    15. Tito Boeri & Katherine Terrell, 2002. "Institutional Determinants of Labor Reallocation in Transition," Journal of Economic Perspectives, American Economic Association, vol. 16(1), pages 51-76, Winter.
    16. Josef C. Brada, 1996. "Privatization Is Transition--Or Is It?," Journal of Economic Perspectives, American Economic Association, vol. 10(2), pages 67-86, Spring.
    17. Gust, Christopher & Marquez, Jaime, 2004. "International comparisons of productivity growth: the role of information technology and regulatory practices," Labour Economics, Elsevier, vol. 11(1), pages 33-58, February.
    18. Benjamin Nancy & Michael Ferrantino, 2001. "Trade Policy and Productivity Growth in OECD Manufacturing," International Economic Journal, Taylor & Francis Journals, vol. 15(4), pages 95-115.
    19. Anderson, James H & Lee, Young & Murrell, Peter, 2000. "Competition and Privatization Amidst Weak Institutions: Evidence from Mongolia," Economic Inquiry, Western Economic Association International, vol. 38(4), pages 527-549, October.
    20. Andreja Bohm & Joze P. Damijan & Boris Majcen & Marko Rems & Matija Rojec & Marko Simoneti, 2001. "Secondary Privatization in Slovenia: Evolution of Ownership Structure and Company Performance Following Mass Privatization," CASE Network Reports 0046, CASE-Center for Social and Economic Research.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lisa Anderson & Beth Freeborn & Jason Hulbert, 2012. "Risk Aversion and Tacit Collusion in a Bertrand Duopoly Experiment," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 40(1), pages 37-50, February.

    More about this item

    JEL classification:

    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sej:ancoec:v:76:3:y:2010:p:577-591. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Laura Razzolini). General contact details of provider: http://edirc.repec.org/data/seaaaea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.