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8. November 2019

Brown Bag Seminar Industrial Economics

Choosing between Explicit Cartel Formation and Tacit Collusion – An Experiment


8. November 2019
10:30 - 11:30


Anna J. Schwartz Room
Room 5.2.010
Mohrenstraße 58
10117 Berlin


Maximilian Andres, University of Potsdam

Abstract: Antitrust authorities try to detect and sanction existing cartels and hinder the formation of new ones. Firms nevertheless try to collude while avoiding sanctions, for example by colluding tacitly instead of explicitly forming a cartel. In this paper, we focus on differences in the communication of firms that either form an explicit cartel or try to collude tacitly. The latter may still involve communication, but not (at least not explicitly) about prices. We use an experimental treatment variation that manipulates how explicitly firms communicate about prices. Using text mining techniques, we then analyze how the content of communication influences the firms' price setting behavior.

Joint with Jana Friedrichsen (DIW Berlin & HU Berlin) and Lisa V. Bruttel (University of Potsdam)


Maximilian Andres, University of Potsdam