Firm-specific information and explicit collusion in experimental oligopolies

Francisco Gomez-Martinez, Sander Onderstal and Joep Sonnemans ()

European Economic Review, 2016, vol. 82, issue C, 132-141

Abstract: We experimentally study the effect of information about competitors’ actions on cartel stability and firms’ incentives to form cartels in Cournot markets. As in previous experiments, markets become very competitive when individualized information is available and participants cannot communicate. In contrast, when communication is possible, results reverse: markets become less competitive and cartels become more stable when individualized information is available. We also observe that the extra profits that firms obtain thanks to the possibility to communicate are higher when individualized information is present, suggesting that firms have greater incentives to form cartels in that situation.

Keywords: C92; L13; L41; Keywords:; Cournot oligopoly; Cartels; Information; Experiments (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (29)

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Related works:
Working Paper: Firm-Specific Information and Explicit Collusion in Experimental Oligopolies (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:82:y:2016:i:c:p:132-141

DOI: 10.1016/j.euroecorev.2015.11.002

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