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Fighting collusion by permitting price discrimination
Helfrich, Magdalena; Herweg, Fabian - 2016
We investigate the effect of a ban on third-degree price discrimination on the sustainability of collusion. We build a model with two firms that may be able to discriminate between two consumer groups. Two cases are analyzed: (i) Best-response symmetries so that profits in the static Nash...
Persistent link: https://www.econbiz.de/10011434582
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Vertical differentiation and collusion : cannibalization or proliferation?
Gabszewicz, Jean Jaskold; Marini, Marco A.; Tarola, Ornella - 2016
In this paper, we tackle the dilemma of pruning versus proliferation in a vertically differentiated oligopoly under the assumption that some firms collude and control both the range of variants for sale and their corresponding prices, likewise a multiproduct firm. We analyse whether pruning...
Persistent link: https://www.econbiz.de/10011451580
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Assessing autonomous algorithmic collusion : Q-learning under short-run price commitments
Klein, Timo - 2018 - Revision: September 2018
A novel debate within competition policy and regulation circles is whether autonomous machine learning algorithms may learn to collude on prices. We show that when fims face short-run price commitments, independent Q-learning (a simple but well-established self-learning algorithm) learns to...
Persistent link: https://www.econbiz.de/10011869980
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Price-fixing policy
Kaplow, Louis - 2018
reconciled with principles of oligopoly theory. This article (1) presents a fundamental reconceptualization of our understanding …
Persistent link: https://www.econbiz.de/10011810824
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Private information, price discrimination, and collusion
Peiseler, Florian; Rasch, Alexander; Shekhar, Shiva - 2018
We analyze firms' ability to sustain collusion in a setting in which horizontally differentiated firms can price-discriminate based on private information regarding consumers' preferences. In particular, firms receive private signals which can be noisy (e.g., big data predictions). We find that...
Persistent link: https://www.econbiz.de/10011892956
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Pricing behavior in partial cartels
Odenkirchen, Johannes - 2018
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. Moreover, we find that prices of cartel insiders and outsiders are not … necessarily on the same level what contradicts common theoretical predictions. This is because communication allows cartel members …
Persistent link: https://www.econbiz.de/10011897162
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A note on consumer flexibility, data quality and collusion
Hasnas, Irina - 2014
In this note we analyze the sustainability of collusion in a game of repeated interaction where firms can price discriminate among consumers based on two types of customer data. This work is related to Liu and Serfes (2007) and Sapi and Suleymanova (2013). Following Sapi and Suleymanova we...
Persistent link: https://www.econbiz.de/10010343547
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Algorithmic Pricing Agents and Tacit Collusion : A Technological Perspective
Ittoo, Ashwin - 2020
Amongst the wealth of concerns raised by Artificial Intelligence (“AI”), one is the risk that the deployment of algorithmic pricing agents on markets will increase occurrences of tacit collusion by orders of magnitude, and well beyond the oligopoly setting where such markets failures have...
Persistent link: https://www.econbiz.de/10012853668
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Tacit Collusion and Price Dispersion in the Presence of Southwest Airlines
Kim, Donggeun - 2020
We study the impact of tacit collusion on price dispersion in the U.S. airline industry. We find that tacit collusion driven by multimarket contact has a positive effect on prices, but a negative effect on price dispersion. Our empirical results suggest that airfares throughout the price...
Persistent link: https://www.econbiz.de/10012846715
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Tacit collusion of conglomerate firms through price signaling under multimarket contact
Horstmann, Niklas - 2016
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...
Persistent link: https://www.econbiz.de/10013006153