Collusion through price ceilings? In search of a focal-point effect

Dirk Engelmann and Wieland Müllerz
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Wieland Müllerz: CentER - CentER

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Abstract: We resume the search for a collusive focal-point effect of price ceilings in laboratory markets. We argue that market conditions in previous studies were unfavorable for collusion which may have been responsible for not .nding such a focal-point effect. Our design aims at maximizing the likelihood of a focal-point effect. Nevertheless, our results again fail to support the focal- point hypothesis. Collusion is as unlikely in markets with a price ceiling as in markets with unconstrained pricing. Overall, static Nash equilibrium predicts the data fairly accurately. We argue this might warrant re-interpretation of .eld studies on anti-competitive e¤ects of price ceilings.

Keywords: Collusion; competition policy; experimental economics; focal point.; focal point (search for similar items in EconPapers)
Date: 2011-07-31
Note: View the original document on HAL open archive server: https://hal.science/peer-01053435
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Citations: View citations in EconPapers (8)

Published in Journal of Economic Behavior and Organization, 2011, 79 (3), pp.291. ⟨10.1016/j.jebo.2011.02.008⟩

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Journal Article: Collusion through price ceilings? In search of a focal-point effect (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:peer-01053435

DOI: 10.1016/j.jebo.2011.02.008

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