Collusion in experimental Bertrand duopolies with convex costs: The role of cost asymmetry

Cédric Argenton and Wieland Müller

International Journal of Industrial Organization, 2012, vol. 30, issue 6, 508-517

Abstract: Theory, experimental studies, as well as antitrust guidelines suggest that symmetry among firms is conducive to more collusive outcomes. We test this perception in a series of experimental repeated Bertrand duopolies where firms have convex costs. We implement symmetric as well as asymmetric markets that vary in their degree of cost asymmetry among firms. We find no evidence of symmetric markets being more prone to collusion than asymmetric markets. If anything, asymmetry helps firms coordinate on higher prices and achieve higher profits.

Keywords: Bertrand competition; Convex costs; Collusion; Coordination; Experimental economics (search for similar items in EconPapers)
JEL-codes: C72 C92 L13 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (32)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:30:y:2012:i:6:p:508-517

DOI: 10.1016/j.ijindorg.2012.05.006

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