Price leadership and unequal market sharing: Collusion in experimental markets

Peter Dijkstra

International Journal of Industrial Organization, 2015, vol. 43, issue C, 80-97

Abstract: We consider experimental markets of repeated homogeneous price-setting duopolies. We investigate the effect on collusion of sequential versus simultaneous price setting. We also examine the effect on collusion of changes in the size of each subject's market share in case both subjects set the same price. Our results show that sequential price setting compared with simultaneous price setting facilitates collusion, if subjects have equal market shares or if the follower has the larger market share. With sequential price setting, we find more collusion if subjects have equal market shares rather than unequal market shares. We observe more collusion if the follower has the larger market share than if the follower has the smaller market share.

Keywords: Collusion; Price leadership; Asymmetries; Experiment (search for similar items in EconPapers)
JEL-codes: C73 C92 L13 L41 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:43:y:2015:i:c:p:80-97

DOI: 10.1016/j.ijindorg.2015.08.003

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