This paper investigates the collusive and competitive effects of algorithmic price recommendations on market outcomes. These recommendations are often non-binding and common in many markets, especially on online platforms. We develop a theoretical framework and derive two algorithms that...

We run a market experiment where firms can choose not only their price but also whether to present comparable offers. They are faced with artificial demand from consumers who make mistakes when assessing the net value of products on the market. If some offers are comparable however, some...

We present a laboratory experiment on the impact of price framing on consumer decision making. Consumer subjects face a search market where two sellers offer a homogenous good. We examine six different price frames with linear per-unit pricing (that is displayed as such) serving as a benchmark....

In this experiment, we analyze whether price ceilings can have a collusive effect in laboratory markets. Our main interest is the focal-point hypothesis which says that a price ceiling may facilitate tacit collusion and lead to higher prices because it resolves a coordination problem inherent to...

We suggest a price signaling strategy that offers a microfoundation for the process leading to tacit collusion under multimarket contact, even in cases where previous theoretical explanations fail. It rests on the assumptions that firms can communicate collusive intentions solely through their...

With this study we resume the search for a collusive focal-point effect of price ceilings in laboratory markets. We argue that market conditions in previous studies were unfavorable for collusion which may have been responsible for not finding such a focal-point effect. Our design aims at...

We analyze the pricing behavior of firms when explicit partial cartels have formed in experimental markets through communication. Using a repeated, asymmetric capacity constraint price game, we show that, in line with theory, a partial cartel is sufficient to increase market prices for all...

Firms signal high quality through high prices even if the market structure is highly competitive and price competition is severe. In a symmetric Bertrand oligopoly where products may differ only in their quality, production cost is increasing in quality and the quality of each firm’s product...

The recent developments in information technology (IT) have enabled firms to employ personalized pricing. Should all firms employ personalized pricing even though the adaptation costs of such pricing strategies are not high? This paper theoretically demonstrates a situation in which all firms do...

This paper analyzes a duopoly model with stochastic demand in which firms first choose their strategy variable and compete afterwards. Contrary to the existing literature, we show that firms do not always choose a quantity which is the variable that induces a smaller degree of competition. The...