Communication, Renegotiation, and the Scope for Collusion

David Cooper () and Kai-Uwe K?hn

American Economic Journal: Microeconomics, 2014, vol. 6, issue 2, 247-78

Abstract: We study the effect of communication in an experimental game where cooperation is consistent with equilibrium play if players share an understanding that cheating will be punished. Consistent with communication acting as a coordinating device, credible preplay threats to punish cheating are the most effective message to facilitate collusion. Promises to collude also improve cooperation. Credible threats do not occur in a treatment with a limited message space that permits threats of punishment. Contrary to some theoretical predictions, renegotiation possibilities facilitate collusion.

JEL-codes: C71 C73 D83 L12 (search for similar items in EconPapers)
Date: 2014
Note: DOI: 10.1257/mic.6.2.247
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Citations: View citations in EconPapers (111)

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Working Paper: Communication, Renegotiation, and the Scope for Collusion (2009)
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