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Tacit Collusion in Price-Setting Duopoly Markets: Experimental Evidence

Author

Listed:
  • Lisa R. Anderson

    () (Department of Economics, College of William and Mary)

  • Beth A. Freeborn

    () (Department of Economics, College of William and Mary)

  • Charles A. Holt

    () (Department of Economics, University of Virginia)

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 in the substitutes treatment. This finding is somewhat in contrast with Potters and Suetens (2007) who observe tacit collusion in two treatments with similar underlying demand structures but with no market context.

Suggested Citation

  • Lisa R. Anderson & Beth A. Freeborn & Charles A. Holt, 2008. "Tacit Collusion in Price-Setting Duopoly Markets: Experimental Evidence," Working Papers 73, Department of Economics, College of William and Mary.
  • Handle: RePEc:cwm:wpaper:73
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    File URL: http://economics.wm.edu/wp/cwm_wp73.pdf
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    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

    Keywords

    collusion; Bertrand; experiment;

    JEL classification:

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

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