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Does Collusion without Communication Exist?

Astri Muren () and Roger Pyddoke
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Roger Pyddoke: Swedish Institute for Transportation and Communications Analysis

No 1999:11, Research Papers in Economics from Stockholm University, Department of Economics

Abstract: Tacit cartels did not arise in experimental triopoly markets even with the help of detailed instructions to prospective cartel members on how to coordinate actions. In duopoly markets tacit cartels were successful, with winning bids and supporting "pass" bids increasing gradually. A simulated third bidder, entering whit known probability, prevented the buildup of cartel prices in duopoly markets. We suggest that support for each other. In markets with more than two sellers the inability to communicate appears to prevent the creation of mutual trust.

Keywords: Tacit collusion; laboratory experiment (search for similar items in EconPapers)
JEL-codes: C91 L41 (search for similar items in EconPapers)
Pages: 15 pages
Date: 1999-07-14
New Economics Papers: this item is included in nep-exp and nep-ind
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