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Tacit Collusion in Price-Setting Duopoly Markets: Experimental Evidence

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Author Info
Lisa R. Anderson () (Department of Economics, College of William and Mary)
Beth A. Freeborn () (Department of Economics, College of William and Mary)
Charles A. Holt () (Department of Economics, University of Virginia)

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Abstract

We study the effect of demand structure on the ability of subjects to tacitly collude on prices by considering Bertrand substitutes and Bertrand complements. We find evidence of collusion in the complements treatment, but no such evidence in the substitutes treatment. This finding is somewhat in contrast with Potters and Suetens (2007) who observe tacit collusion in two treatments with similar underlying demand structures but with no market context.

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File URL: http://web.wm.edu/economics/wp/cwm_wp73.pdf
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Publisher Info
Paper provided by Department of Economics, College of William and Mary in its series Working Papers with number 73.

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Length: 18 pages
Date of creation: 10 Jul 2008
Date of revision:
Handle: RePEc:cwm:wpaper:73

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Web page: http://www.wm.edu/economics/
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Related research
Keywords: collusion; Bertrand; experiment;

Find related papers by JEL classification:
C9 - Mathematical and Quantitative Methods - - Design of Experiments
L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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This page was last updated on 2009-10-20.


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