Risk Aversion and Tacit Collusion in a Bertrand Duopoly Experiment
Lisa Anderson,
Beth Freeborn and
Jason Hulbert ()
Additional contact information
Jason Hulbert: Department of Economics, College of William and Mary
No 84, Working Papers from Department of Economics, College of William and Mary
Abstract:
We investigate the relationship between collusive behavior in Bertrand oligopoly experiments and subject heterogeneity in risk preferences. We find that risk aversion is positively associated with tacit collusion when the goods are complements, but find no evidence of collusive behavior when the goods are substitutes. Furthermore, risk aversion is associated with lower prices with complement goods, but does not impact pricing behavior with substitute goods. In both treatments, we find that subjects tend to follow the price change of the other seller. In the complements treatment, however, this tendency increases with the degree of risk aversion.
Keywords: Bertrand duopoly; risk aversion; collusion; experiment (search for similar items in EconPapers)
JEL-codes: C9 L1 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2009-06-11
New Economics Papers: this item is included in nep-com, nep-exp, nep-mic and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations:
Downloads: (external link)
http://economics.wm.edu/wp/cwm_wp84.pdf (application/pdf)
Related works:
Journal Article: Risk Aversion and Tacit Collusion in a Bertrand Duopoly Experiment (2012) 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:cwm:wpaper:84
Access Statistics for this paper
More papers in Working Papers from Department of Economics, College of William and Mary Contact information at EDIRC.
Bibliographic data for series maintained by Daifeng He ( this e-mail address is bad, please contact ) and Alfredo Pereira ().