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We analyze the effects of better algorithmic demand forecasting on collusive profits. We show that the comparative statics crucially depend on the whether actions are observable. Thus, the optimal antitrust policy needs to take into account the institutional settings of the industry in question....
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We build a game-theoretic model to examine how better demand forecasting due to algorithms, machine learning and artificial intelligence affects the sustainability of collusion in an industry. We find that while better forecasting allows colluding firms to better tailor prices to demand...
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Justice has great latitude in recommending corporate cartel fines to the federal courts, and its recommendations are nearly … direct test of the optimal deterrence theory of antitrust crimes.Regressions are fitted to a sample of the corporations that …-deterrence model is quite good. We find that U.S. corporate cartel fines are strongly directly related to economic injuries from …
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