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This paper studies repeated games with private monitoring where players make optimal decisions with respect to costly monitoring activities, just as they do with respect to stage-game actions. We consider the case where each player can observe other players' current-period actions accurately...
Persistent link: https://www.econbiz.de/10005385284
Theoretical work has suggested that contact between firms in different markets can facilitate tacit collusion. Empirical work on this link has been limited. We address the paucity of empirical evidence with a novel plant-level dataset for the cement industry during the Great Depression. We find...
Persistent link: https://www.econbiz.de/10011051616
The paper considers tacit collusion in markets which are not fully transparent on both sides. Consumers only detect prices with some probability before deciding which fi?rm to purchase from, and each fi?rm only detects the other fi?rm's price with some probability. Increasing transparency on the...
Persistent link: https://www.econbiz.de/10005087411
This paper investigates the effects on tacit collusion of increased market transparency on the consumer side as well as on the producer side of a market. Increasing market transparency on the consumer side, increases the benefits to a firm from undercutting the collusive price. It also decreases...
Persistent link: https://www.econbiz.de/10005749388
In several European merger cases competition authorities have demanded that the merging firm auctions of virtual capacity. The buyer of virtual capacity receives an option on an amount of output at a pre-specified price, typically equal to marginal cost. This output is sold in the market in...
Persistent link: https://www.econbiz.de/10005749393
Danish ready-mixed concrete is produced in regional oligopolies. Firms rely on price discrimination through secret discounts. The antitrust authority interprets this as lack of competition and has decided to activate its chief weapon against dormant competition: To make the market more...
Persistent link: https://www.econbiz.de/10005543428
We analyze the time-series of prices in the Spanish electricity market by means of a time varying-transition-probabilities Markov Switching model. Accounting for demand and supply conditions, we show that the time-series of prices is characterized by two significantly different price levels....
Persistent link: https://www.econbiz.de/10004977870
We examine the novel concept for repeated noncooperative games with bounded rationality: \Nash-2" equilibrium, called also \threatening-proof prole" in [16, Iskakov M., Iskakov A., 2012b]. It is weaker than Nash equilibrium and equilibrium in secure strategies: a player takes into account not...
Persistent link: https://www.econbiz.de/10011098907
The arm's length principle states that the transfer price between two associated enterprises should be the price that would be paid for similar goods in similar circumstances by unrelated parties dealing at arm's length with each other. This paper examines the effect of the arm's length...
Persistent link: https://www.econbiz.de/10011107722
Tacit collusion reduces welfare comparably to explicit collusion but remains mostly unaddressed by antitrust enforcement which greatly depends on evidence of explicit communication. We propose to target specific elements of firms’ behavior that facilitate tacit collusion by providing...
Persistent link: https://www.econbiz.de/10011210886