Conspiracies and secret price discounts in the marketplace: Evidence from field experiments

John List and Michael Price

Framed Field Experiments from The Field Experiments Website

Abstract: We explore collusion by using the tools of experimental economics in a naturally occurring marketplace. We report that competitive price theory adequately organizes data in multilateral decentralized bargaining markets without conspiratorial opportunities. When conspiratorial opportunities are allowed and contract prices are perfectly observed, prices (quantities) are considerably above (below) competitive levels. When sellers receive imperfect price signals, outcomes are intermediate to those of competitive markets and collusive markets with full information. Finally, experienced buyers serve as a catalyst to thwart attempts by sellers to engage in anticompetitive pricing: in periods where experienced agents transact in the market, average transaction prices are below those realized in periods where only inexperienced agents execute trades.

Date: 2005
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Citations: View citations in EconPapers (19)

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Journal Article: Conspiraces and Secret Price Discounts in the Marketplace: Evidence from Field Experiments (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:feb:framed:00115

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