Maverick – Making Sense of a Conjecture of Antitrust Policy in the Lab

Christoph Engel and Axel Ockenfels

No 2013_14, Discussion Paper Series of the Max Planck Institute for Research on Collective Goods from Max Planck Institute for Research on Collective Goods

Abstract: Antitrust authorities all over the world are concerned if a particularly aggressive competitor, a "maverick", is bought out of the market. Yet there is a lack of theoretical justification. One plausible determinant of acting as a maverick is behavioral: the maverick derives utility from acting competitively. We test this conjecture in the lab. In a pretest, we classify participants by their social value orientation. Individuals who are rivalistic in an allocation task indeed bid more aggressively in a laboratory oligopoly market. This disciplines incumbents. In our setting, this does not create sufficient incentives for buying out mavericks, though.

Keywords: Oligopoly; aggressive sales; maverick; social value orientation; rivalry (search for similar items in EconPapers)
JEL-codes: C91 D03 D22 D43 K21 L13 L41 (search for similar items in EconPapers)
Date: 2013-08, Revised 2014-01
New Economics Papers: this item is included in nep-com and nep-exp
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:mpg:wpaper:2013_14

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