We study collusive behaviour in experimental duopolies that compete in prices under dynamic demand conditions. In one treatment the demand grows at a constant rate. In the other treatment the demand declines at another constant rate. The rates are chosen so that the evolution of the demand in...

It has been argued that having a contract market before the spot market enhances competition (Allaz and Vila, 1993). Taking into account the repeated nature of electricity markets, we check the robustness of the argument that the access to contract markets reduces the market power of generators....

This paper analyzes the role of patience in a repeated Bertrand duopoly where firms bargain over which collusive price and market share to implement. It is shown that the least patient firm's market share is not monotone in its own discount factor

From the perspective of competitors, competition may be modeled as a prisoner’s dilemma. Setting the monopoly price is cooperation, undercutting is defection. Jointly, competitors are better off if both are faithful to a cartel. Individually, profit is highest if only the competitor(s) is...

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...

We report on an experiment designed to study a dynamic model of quantity competition where firms continuously revise their production targets prior to the play of the "one-shot" game. We investigate how the observability of rival firm's plans and the technology for implementation of revised...

Collusion sustainability depends on firms' ability to impose sufficiently severe punishments in the event of deviation from the collusive rule. We extend results from the literature on optimal collusion by investigating the role of a limited liability constraint. We examine all situations in...

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...

The instability of Cournot cartels can be overcome by a collective wage agreement if this agreement stipulates minimum fixed wages and piece rates that are legally enforceable. This new view on the institution of collective wage agreements is not only relevant for strategic management, it also...

Multiple Cournot oligopoly experiments found more collusive behavior in markets with fewer firms (Huck et al., 2004; Hostmann et al., 2018). This result could be explained by a higher difficulty to coordinate or by lower incentives to collude in markets with more firms. We show that the Quantal...