IDEAS home Printed from https://ideas.repec.org/a/spr/jecrev/v70y2019i3d10.1111_jere.12241.html
   My bibliography  Save this article

Collusion and Information Exchange

Author

Listed:
  • Yu Awaya

    (University of Rochester
    Osaka University)

Abstract

Antitrust authorities view that exchange of individual firms’ sales data is more anti-competitive than that of aggregate sales data. In this paper, I survey antitrust implications of such inter-firm information exchange. I argue that both types of information exchange are anti-competitive under some circumstances. More precisely, I compare profits when each type of information exchange is allowed to that when firms can only observe their own sales (Stigler’s secret price-cutting model), and the former is bigger than the latter. I also provide a general method to bound the equilibrium profits without such information exchange.

Suggested Citation

  • Yu Awaya, 2019. "Collusion and Information Exchange," The Japanese Economic Review, Springer, vol. 70(3), pages 394-402, September.
    • Handle: RePEc:spr:jecrev:v:70:y:2019:i:3:d:10.1111_jere.12241
    DOI: 10.1111/jere.12241
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1111/jere.12241
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1111/jere.12241?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Escobar, Juan F. & Llanes, Gastón, 2018. "Cooperation dynamics in repeated games of adverse selection," Journal of Economic Theory, Elsevier, vol. 176(C), pages 408-443.
    2. Athey, Susan & Bagwell, Kyle, 2001. "Optimal Collusion with Private Information," RAND Journal of Economics, The RAND Corporation, vol. 32(3), pages 428-465, Autumn.
    3. Joseph E. Harrington, Jr, 2006. "How Do Cartels Operate?," Economics Working Paper Archive 531, The Johns Hopkins University,Department of Economics.
    4. Moulin, Herve & Ray, Indrajit & Sen Gupta, Sonali, 2014. "Improving Nash by coarse correlation," Journal of Economic Theory, Elsevier, vol. 150(C), pages 852-865.
    5. David Genesove & Wallace P. Mullin, 2001. "Rules, Communication, and Collusion: Narrative Evidence from the Sugar Institute Case," American Economic Review, American Economic Association, vol. 91(3), pages 379-398, June.
    6. Sahuguet, Nicolas & Walckiers, Alexis, 2017. "A theory of hub-and-spoke collusion," International Journal of Industrial Organization, Elsevier, vol. 53(C), pages 353-370.
    7. Marhsall, Robert C. & Marx, Leslie M., 2014. "The Economics of Collusion: Cartels and Bidding Rings," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262525941, December.
    8. Takuo Sugaya & Alexander Wolitzky, 2018. "Maintaining Privacy in Cartels," Journal of Political Economy, University of Chicago Press, vol. 126(6), pages 2569-2607.
    9. Harrington, Joseph E., 2006. "How Do Cartels Operate?," Foundations and Trends(R) in Microeconomics, now publishers, vol. 2(1), pages 1-105, August.
    10. Gerard-Varet, L. A. & Moulin, H., 1978. "Correlation and duopoly," Journal of Economic Theory, Elsevier, vol. 19(1), pages 123-149, October.
    11. Olivier Compte, 1998. "Communication in Repeated Games with Imperfect Private Monitoring," Econometrica, Econometric Society, vol. 66(3), pages 597-626, May.
    12. repec:cup:cbooks:9781316779309 is not listed on IDEAS
    13. Roughgarden,Tim, 2016. "Twenty Lectures on Algorithmic Game Theory," Cambridge Books, Cambridge University Press, number 9781316624791.
    14. Roughgarden,Tim, 2016. "Twenty Lectures on Algorithmic Game Theory," Cambridge Books, Cambridge University Press, number 9781107172661.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yu Awaya & Vijay Krishna, 2020. "Information exchange in cartels," RAND Journal of Economics, RAND Corporation, vol. 51(2), pages 421-446, June.
    2. Yu Awaya & Vijay Krishna, 2016. "On Communication and Collusion," American Economic Review, American Economic Association, vol. 106(2), pages 285-315, February.
    3. David Spector, 2022. "Cheap Talk, Monitoring and Collusion," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 60(2), pages 193-216, March.
    4. Mouraviev, Igor, 2014. "Explicit Collusion under Antitrust Enforcement," Center for Mathematical Economics Working Papers 494, Center for Mathematical Economics, Bielefeld University.
    5. Dechenaux, Emmanuel & Mago, Shakun D., 2019. "Communication and side payments in a duopoly with private costs: An experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 165(C), pages 157-184.
    6. David Spector, 2022. "Cheap Talk, Monitoring and Collusion," PSE-Ecole d'économie de Paris (Postprint) halshs-03760756, HAL.
    7. David Spector, 2022. "Cheap Talk, Monitoring and Collusion," Post-Print halshs-03760756, HAL.
    8. Awaya, Yu & Krishna, Vijay, 2019. "Communication and cooperation in repeated games," Theoretical Economics, Econometric Society, vol. 14(2), May.
    9. Kaplow, Louis & Shapiro, Carl, 2007. "Antitrust," Handbook of Law and Economics, in: A. Mitchell Polinsky & Steven Shavell (ed.), Handbook of Law and Economics, edition 1, volume 2, chapter 15, pages 1073-1225, Elsevier.
    10. Konstantinos Georgalos & Indrajit Ray & Sonali SenGupta, 2020. "Nash versus coarse correlation," Experimental Economics, Springer;Economic Science Association, vol. 23(4), pages 1178-1204, December.
    11. Nikolaus Fink & Philipp Schmidt-Dengler & Konrad Stahl & Christine Zulehner, 2017. "Registered cartels in Austria: an overview," European Journal of Law and Economics, Springer, vol. 44(3), pages 385-422, December.
    12. Andreoli-Versbach, Patrick & Franck, Jens-Uwe, 2013. "Actions Speak Louder than Words: Econometric Evidence to Target Tacit Collusion in Oligopolistic Markets," Discussion Papers in Economics 16179, University of Munich, Department of Economics.
    13. David Spector, 2015. "Facilitating collusion by exchanging non-verifiable sales reports," Working Papers halshs-01119959, HAL.
    14. Mitsuru Igami & Takuo Sugaya, 2022. "Measuring the Incentive to Collude: The Vitamin Cartels, 1990–99 [“Extremal Equilibria of Oligopolistic Supergames”]," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 89(3), pages 1460-1494.
    15. Lee, Gea M., 2010. "Optimal collusion with internal contracting," Games and Economic Behavior, Elsevier, vol. 68(2), pages 646-669, March.
    16. David Spector, 2017. "Cheap talk, monitoring and collusion," Working Papers hal-01975642, HAL.
    17. Andersson, Ola, 2006. "Bargaining in Collusive Markets," Working Papers 2006:21, Lund University, Department of Economics.
    18. Heng Liu, 2017. "Correlation and unmediated cheap talk in repeated games with imperfect monitoring," International Journal of Game Theory, Springer;Game Theory Society, vol. 46(4), pages 1037-1069, November.
    19. Harrington, Joseph E., 2017. "A theory of collusion with partial mutual understanding," Research in Economics, Elsevier, vol. 71(1), pages 140-158.
    20. Ponce Carlos J. & Roldán Flavia, 2017. "Cartels as Small World Networks: Evidence from Graphite Electrode Cartel," Review of Network Economics, De Gruyter, vol. 16(1), pages 27-61, March.

    More about this item

    Keywords

    C73; D43; D83; L12; L13; L25;
    All these keywords.

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm 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:spr:jecrev:v:70:y:2019:i:3:d:10.1111_jere.12241. See general information about how to correct material in RePEc.

    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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.