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An experiment is conducted were subjects interact repeatedly to examine the effect of a particular leniency program on cartel formation, cartel stability and cartel recidivism. The program leads to lower prices for three reasons. First, non-cooperators are more persistent in their behavior which...
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We offer a theory of how the combination of budget constraints and insurance drives up prices. A natural context for … our theory is the health care market, where drug prices can be very high. Our model predicts that monopoly prices for …
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