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Tacit Collusion in Price‐Setting Duopoly Markets: Experimental Evidence with Complements and Substitutes

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  • Lisa R. Anderson
  • Beth A. Freeborn
  • Charles A. Holt

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 is found in the substitutes treatment. This finding is somewhat in contrast with a previous study that observes tacit collusion in two treatments with similar underlying demand structures but with no market framing.

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  • Lisa R. Anderson & Beth A. Freeborn & Charles A. Holt, 2010. "Tacit Collusion in Price‐Setting Duopoly Markets: Experimental Evidence with Complements and Substitutes," Southern Economic Journal, John Wiley & Sons, vol. 76(3), pages 577-591, January.
    • Handle: RePEc:wly:soecon:v:76:y:2010:i:3:p:577-591
    DOI: 10.4284/sej.2010.76.3.577
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