-known commitment problem by introducing communication. Allowing the upstream firm to chat privately with each downstream firm reduces … total offered quantity from near the Cournot level (observed in the absence of communication) halfway toward the monopoly … bargaining advantage from open communication that all of the gains from monopolizing the market accrue to them. A simple …

experiments with written cheap-talk communication between players and we compare them to treatments without the possibility to … tacitly but that the number of firms does not significantly affect outcomes with communication. As a result, the payoff gain … from communication increases with the number of firms, at a decreasing rate. …

which support the theory remarkably well. In the stochastic variant, there is more signalling behavior than with …