Assuming constant marginal cost, it is shown that a switch from specific to ad valorem taxation has no effect on the critical discount factor required to sustain collusion. This result is shown to hold for Cournot oligopoly as well as for Bertrand oligopoly when collusion is sustained with...

We analyze the determinants of tacit collusion in an infinitely repeated contest with noise in the contest success function. Sustaining collusion via Nash reversion strategies is easier the more noise there is, and is more difficult the larger is the contest's prize value. An increase in the...

A competition authority has an objective, which specifies what output profile firms need to produce as a function of production costs. These costs change over time and are only known by the firms. The objective is implementable if inequilibrium, the firms cannot collude on their reports to the...

We revisit the pros and cons of cartel criminalization with focus on its possible introduction in the EU. We document a recent phenomenon that we name EU ``leniency inflation", whereby leniency has been increasingly awarded to many, and sometimes all members of a cartel. We argue that, coupled...

We investigate asymmetric price transmission (APT) in laboratory experiments and find that imperfect tacit collusion is likely the cause in our otherwise frictionless markets. We vary the number of sellers across markets to evaluate the role competition plays in APT. We report similar magnitudes...

It is widely believed that cartels with too many members are destined to fail. The standard argument is that as the number of cartel members increases, shares of collusive profit diminish relative to deviation profits. We show that this argument is built on unreasonable assumptions about plant...

We use experiments to analyze what type of communication is most effective in achieving cooperation in a simple collusion game. Consistent with the existing literature on communication and collusion, even minimal communication leads to a short run increase in collusion. However, in a limited...

Modern antitrust engenders a possible conflict between public and private enforcement due to the central role of Leniency Programs. Damage actions may reduce the attractiveness of Leniency Programs for cartel participants if their cooperation with the competition authority increases the chance...

Many real-world conflicts are to some extent determined randomly by noise. The way in which noise is modeled in contest success functions (CSFs) has important implications both for the possibility of forming cooperative relationships as well as for the features of such relationships. In a...

In this paper we investigate how cognitive ability and character skills influence behavior, success and the evolution of play towards Nash equilibrium in repeated strategic interactions. We study behavior in a p-beauty contest experiment and find striking differences according to cognitive...