Communication and collusion in oligopoly experiments: A meta-study using machine learning

Maximilian Andres () and Lisa Bruttel
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Maximilian Andres: University of Bremen

No 88, CEPA Discussion Papers from Center for Economic Policy Analysis

Abstract: While an influential body of economic literature shows that allowing for communication between firms increases collusion in oligopolies, so far we have only anecdotal evidence on the precise communication content that helps firms to coordinate their behavior. In this paper, we conduct a primary-data meta-study on oligopoly experiments and use a machine learning approach to identify systematic patterns in the communication content across studies. Starting with the communication topics mentioned most often in the literature (agreements, joint benefit, threat of punishment, promise/trust), we use a semi-supervised approach to detect all relevant topics. In a second step, we study the effect of these topics on the rate of collusion among the firms. We find that agreements on specific behavior are decisive for the strong positive effect of communication on collusion, while other communication topics have no effect.

Keywords: collusion; communication; machine learning; meta-study; experiment (search for similar items in EconPapers)
JEL-codes: C92 D43 L41 (search for similar items in EconPapers)
Date: 2025-06
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Persistent link: https://EconPapers.repec.org/RePEc:pot:cepadp:88

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