Firm-Specific Information and Explicit Collusion in Experimental Oligopolies

Francisco Gomez-Martin, Sander Onderstal and Joep Sonnemans ()
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Francisco Gomez-Martin: University of Amsterdam, the Netherlands

No 15-054/I, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: Published in the 'European Economic Review' .

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: Cournot oligopoly; Cartels; Information; Experiments (search for similar items in EconPapers)
JEL-codes: C92 L13 L41 (search for similar items in EconPapers)
Date: 2015-05-10
New Economics Papers: this item is included in nep-bec, nep-com, nep-exp, nep-gth, nep-ind and nep-law
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Firm-specific information and explicit collusion in experimental oligopolies (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:tin:wpaper:20150054

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