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Tacit Collusion. The Neglected Experimental Evidence

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  • Christoph Engel

    () (Max Planck Institute for Research on Collective Goods, Bonn)

Abstract

Both in the US and in Europe, antitrust authorities prohibit merger not only if the merged entity, in and of itself, is no longer sufficiently controlled by competition. The authorities also intervene if, post merger, the market structure has changed such that "tacit collusion" becomes disturbingly more likely. It seems that antitrust neglects the fact that, for more than 50 years, economists have been doing experiments on this very question. Almost any conceivable determinant of higher or lower collusion has been tested. This paper standardises the evidence by way of a meta-study, and relates experimental findings as closely as possible to antitrust doctrine.

Suggested Citation

  • Christoph Engel, 2007. "Tacit Collusion. The Neglected Experimental Evidence," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2007_14, Max Planck Institute for Research on Collective Goods, revised Jan 2015.
  • Handle: RePEc:mpg:wpaper:2007_14
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    References listed on IDEAS

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    Cited by:

    1. repec:kap:pubcho:v:173:y:2017:i:1:d:10.1007_s11127-017-0473-5 is not listed on IDEAS
    2. Nan Zhou & Li Zhang & Shijian Li & Zhijian Wang, 2018. "Algorithmic Collusion in Cournot Duopoly Market: Evidence from Experimental Economics," Papers 1802.08061, arXiv.org.
    3. Christoph Engel, 2011. "Competition as a Socially Desirable Dilemma – Theory v. Experimental Evidence," Chapters,in: Competition Policy and the Economic Approach, chapter 13 Edward Elgar Publishing.
    4. repec:kap:expeco:v:20:y:2017:i:4:d:10.1007_s10683-017-9517-4 is not listed on IDEAS
    5. Lenka Fiala & Sigrid Suetens, 2017. "Transparency and cooperation in repeated dilemma games: a meta study," Experimental Economics, Springer;Economic Science Association, vol. 20(4), pages 755-771, December.

    More about this item

    Keywords

    Oligopoly; Coordinated Effects; Tacit Collusion; Merger Guidelines; Airtours; Experimental Markets;

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices

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