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Does Collusion without Communication Exist?

Author

Listed:
  • Muren, Astri

    () (Dept. of Economics, Stockholm University)

  • Pyddoke, Roger

    (Swedish Institute for Transportation and Communications Analysis)

Abstract

Tacit cartels did not arise in experimental triopoly markets even with the help of detailed instructions to prospective cartel members on how to coordinate actions. In duopoly markets tacit cartels were successful, with winning bids and supporting "pass" bids increasing gradually. A simulated third bidder, entering whit known probability, prevented the buildup of cartel prices in duopoly markets. We suggest that support for each other. In markets with more than two sellers the inability to communicate appears to prevent the creation of mutual trust.

Suggested Citation

  • Muren, Astri & Pyddoke, Roger, 1999. "Does Collusion without Communication Exist?," Research Papers in Economics 1999:11, Stockholm University, Department of Economics.
  • Handle: RePEc:hhs:sunrpe:1999_0011
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    More about this item

    Keywords

    Tacit collusion; laboratory experiment;

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices

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