How much you talk matters: cheap talk and collusion in a Bertrand oligopoly game

Jun Yeong Lee () and Elizabeth Hoffman
Additional contact information
Jun Yeong Lee: Pusan National University

Theory and Decision, 2025, vol. 98, issue 2, No 5, 277-297

Abstract: Abstract This study investigates the impact of cheap talk on price and participant profits using a repeated Bertrand oligopoly experiment. During the first 10 rounds, participants are not allowed to communicate with each other. Twenty additional rounds are then played in which the participants can text with one another using an instant message system. Some groups are allowed to text before every round, some before every other round, some every third round, some every fourth round, and others only every fifth round. On average, when texting is allowed, groups attempt to collude to raise the price after being allowed to text. In summary, success in collusion with cheap talk is correlated with a combination of how often participants can text, the subject of their texts, and whether participants actually text when they can.

Keywords: Bertrand competition; Experiments; Collusion; Cheap talk; Amazon MTurk (search for similar items in EconPapers)
Date: 2025
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s11238-024-10001-3 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: How much you talk matters: cheap talk and collusion in a Bertrand oligopoly game (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:theord:v:98:y:2025:i:2:d:10.1007_s11238-024-10001-3

Ordering information: This journal article can be ordered from
http://www.springer. ... ry/journal/11238/PS2

DOI: 10.1007/s11238-024-10001-3

Access Statistics for this article

Theory and Decision is currently edited by Mohammed Abdellaoui

More articles in Theory and Decision from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().