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Collusion through price ceilings? In search of a focal-point effect

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  • Dirk Engelmann

    (CentER - CentER)

  • Wieland Müllerz

    (CentER - CentER)

Abstract

We resume the search for a collusive focal-point effect of price ceilings in laboratory markets. We argue that market conditions in previous studies were unfavorable for collusion which may have been responsible for not .nding such a focal-point effect. Our design aims at maximizing the likelihood of a focal-point effect. Nevertheless, our results again fail to support the focal- point hypothesis. Collusion is as unlikely in markets with a price ceiling as in markets with unconstrained pricing. Overall, static Nash equilibrium predicts the data fairly accurately. We argue this might warrant re-interpretation of .eld studies on anti-competitive e¤ects of price ceilings.

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  • Dirk Engelmann & Wieland Müllerz, 2011. "Collusion through price ceilings? In search of a focal-point effect," Post-Print peer-01053435, HAL.
    • Handle: RePEc:hal:journl:peer-01053435
    DOI: 10.1016/j.jebo.2011.02.008
    Note: View the original document on HAL open archive server: https://hal.science/peer-01053435
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    Cited by:

    1. Patrick Rey & Jean Tirole, 2019. "Price Caps as Welfare-Enhancing Coopetition," Journal of Political Economy, University of Chicago Press, vol. 127(6), pages 3018-3069.
    2. Rey, Patrick & Tirole, Jean, 2013. "Cooperation vs. Collusion: How Essentiality Shapes Co-opetition," IDEI Working Papers 801, Institut d'Économie Industrielle (IDEI), Toulouse.
    3. Friesen, Lana & Gangadharan, Lata & Khezr, Peyman & MacKenzie, Ian A., 2022. "Mind your Ps and Qs! Variable allowance supply in the US Regional Greenhouse Gas Initiative," Journal of Environmental Economics and Management, Elsevier, vol. 112(C).
    4. Comisión Nacional de los Mercados y la Competencia (CNMC), 2025. "Study on services in ports (II): cargo handling and passenger service," Colección Estudios de Mercado E/CNMC/005/24_ENG, Comisión Nacional de los Mercados y la Competencia (CNMC).
    5. Xiaofang Liu & Jian Li & Jun Wu & Guoqing Zhang, 2017. "Coordination of supply chain with a dominant retailer under government price regulation by revenue sharing contracts," Annals of Operations Research, Springer, vol. 257(1), pages 587-612, October.
    6. Viplav Saini & Jordan F. Suter, 2015. "Capacity Constraints And Information Revelation In Procurement Auctions," Economic Inquiry, Western Economic Association International, vol. 53(2), pages 1236-1258, April.
    7. Jan Potters & Sigrid Suetens, 2013. "Oligopoly Experiments In The Current Millennium," Journal of Economic Surveys, Wiley Blackwell, vol. 27(3), pages 439-460, July.
    8. Lana Friesen & Lata Gangadharan & Peyman Khezr & Ian A. MacKenzie, 2020. "Mind your Ps and Qs! An Experiment on Variable Allowance Supply in the US Regional Greenhouse Gas Initiative," Discussion Papers Series 618, School of Economics, University of Queensland, Australia.
    9. Rudy Santore & Youping Li & Stephen Cotten, 2015. "Colluding with a conscience," Journal of Economics, Springer, vol. 114(3), pages 255-269, April.
    10. Maria Bigoni & Sven-Olof Fridolfsson & Chloé Le Coq & Giancarlo Spagnolo, 2015. "Trust, Leniency, and Deterrence," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 31(4), pages 663-689.
    11. Willem H. Boshoff & Johannes Paha, 2021. "List Price Collusion," Journal of Industry, Competition and Trade, Springer, vol. 21(3), pages 393-409, September.
    12. Spagnolo, Giancarlo & Fridolfsson, Sven-Olof & Le Coq, Chloé & Bigoni, Maria, 2012. "Trust and Deterrence," CEPR Discussion Papers 9002, C.E.P.R. Discussion Papers.
    13. Hoang-Tung, Nguyen & Viet Hung, Do & Kato, Hironori & Binh, Phan Le, 2021. "Modeling ceiling price for build-operate-transfer road projects in developing countries," Economics of Transportation, Elsevier, vol. 28(C).
    14. Angerer, Martin, 2020. "Regulation of retail gasoline prices," Finance Research Letters, Elsevier, vol. 36(C).
    15. Halevy, Yoram & Peters, Michael, 2007. "Other Regarding Preferences: Outcomes, Intentions, or Interdependence," Microeconomics.ca working papers peters-07-03-31-11-46-48, Vancouver School of Economics, revised 24 Jun 2009.
    16. Comisión Nacional de los Mercados y la Competencia (CNMC), 2025. "Study on services in ports (I): pilotage, towing, mooring and unmooring, collection of ship-generated waste and fuel supply," Colección Estudios de Mercado E/CNMC/004/24_ENG, Comisión Nacional de los Mercados y la Competencia (CNMC).

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