The role of demand information and monitoring in tacit collusion.
Motivated by the Green and Porter (1984) and Rotemberg and Saloner (1986) models, we construct lab experiments to test the effects of two factors on collusion: information (regarding next period's demand state) and monitoring (of a rival's past action). Results indicate that information may facilita...
| Published in: | RAND Journal of Economics (Wiley-Blackwell) Vol. 43; no. 1; pp. 78 - 100 |
|---|---|
| Main Author: | |
| Format: | Article |
| Published: |
Wiley-Blackwell
Spring2012
|
| Subjects: | |
| Online Access: | View this record in EBSCOhost |
| fields | @attributes: recordID: 1 pdfLink: plink: https://search.ebscohost.com/login.aspx?direct=true&db=ssf&AN=73930307&site=ehost-live header: @attributes: shortDbName: ssf uiTerm: 73930307 longDbName: Social Sciences Full Text (H.W. Wilson) uiTag: AN controlInfo: bkinfo: jinfo: jid: 07416261 56RJ jtl: RAND Journal of Economics (Wiley-Blackwell) issn: 07416261 maglogo: Y pubinfo: dt: Spring2012 vid: 43 iid: 1 pid: 480 pub: Wiley-Blackwell artinfo: ui: 73930307 10.1111/j.1756-2171.2012.00157.x ppf: 78 ppct: 22 formats: fmt: @attributes: type: P size: 1.6MB tig: atl: The role of demand information and monitoring in tacit collusion. aug: au: Rojas, Christian affil: University of Massachusetts Amherst; . su: Economic demand Economic efficiency Rate of return Economic research Prediction theory Stochastic analysis sug: subj: Economic demand Research and Development in the Social Sciences and Humanities Economic efficiency Rate of return Economic research Prediction theory Stochastic analysis ab: Motivated by the Green and Porter (1984) and Rotemberg and Saloner (1986) models, we construct lab experiments to test the effects of two factors on collusion: information (regarding next period's demand state) and monitoring (of a rival's past action). Results indicate that information may facilitate collusion more than monitoring, especially as subjects gain experience. A robust finding is that subjects in the Rotemberg and Saloner treatment cooperate as predicted by this theory: collusion falls dramatically in anticipation of unusually large demand and returns to high levels otherwise. These results suggest that tacit and fairly elaborate collusion could arise in stochastic environments. pubtype: Academic Journal doctype: Article src: R language: English refInfo: copyright: @attributes: flag: N holdings: @attributes: islocal: N |
|---|