The relative efficacy of price announcements and express communication for collusion: experimental findings
This study conducts experiments to determine the modes of communication that are able to produce and sustain collusion and how the efficacy of communication depends on market structure. Two communication treatments are considered: non-binding price announcements and unrestricted written communicatio...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
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Elsevier
2016
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| Online Access: | https://eprints.nottingham.ac.uk/33854/ |
| _version_ | 1848794719617810432 |
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| author | Harrington, Joseph E. Hernan-Gonzalez, Roberto Kujal, Praveen |
| author_facet | Harrington, Joseph E. Hernan-Gonzalez, Roberto Kujal, Praveen |
| author_sort | Harrington, Joseph E. |
| building | Nottingham Research Data Repository |
| collection | Online Access |
| description | This study conducts experiments to determine the modes of communication that are able to produce and sustain collusion and how the efficacy of communication depends on market structure. Two communication treatments are considered: non-binding price announcements and unrestricted written communication. We find that price announcements are conducive to coordinating on a high price but only under duopoly and when firms are symmetric. The standard experimental finding that collusion without communication is rare when there are more than two firms is shown to be robust to allowing firms to make price announcements. When firms are asymmetric, price announcements do result in higher prices but there is little evidence that firms are coordinating their behavior. When firms are allowed to engage in unrestricted written communication, coordination on high prices occurs for all market structures. We find that the incremental value to express communication (compared to price announcements) is greater when firms are asymmetric and there are more firms. |
| first_indexed | 2025-11-14T19:20:40Z |
| format | Article |
| id | nottingham-33854 |
| institution | University of Nottingham Malaysia Campus |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-14T19:20:40Z |
| publishDate | 2016 |
| publisher | Elsevier |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | nottingham-338542018-01-19T04:44:48Z https://eprints.nottingham.ac.uk/33854/ The relative efficacy of price announcements and express communication for collusion: experimental findings Harrington, Joseph E. Hernan-Gonzalez, Roberto Kujal, Praveen This study conducts experiments to determine the modes of communication that are able to produce and sustain collusion and how the efficacy of communication depends on market structure. Two communication treatments are considered: non-binding price announcements and unrestricted written communication. We find that price announcements are conducive to coordinating on a high price but only under duopoly and when firms are symmetric. The standard experimental finding that collusion without communication is rare when there are more than two firms is shown to be robust to allowing firms to make price announcements. When firms are asymmetric, price announcements do result in higher prices but there is little evidence that firms are coordinating their behavior. When firms are allowed to engage in unrestricted written communication, coordination on high prices occurs for all market structures. We find that the incremental value to express communication (compared to price announcements) is greater when firms are asymmetric and there are more firms. Elsevier 2016-08 Article PeerReviewed application/pdf en cc_by_nc_nd https://eprints.nottingham.ac.uk/33854/1/The%20relative%20efficacy%20of%20Price%20Announcements%20and%20Express%20Communication%20for%20Collusion.pdf Harrington, Joseph E., Hernan-Gonzalez, Roberto and Kujal, Praveen (2016) The relative efficacy of price announcements and express communication for collusion: experimental findings. Journal of Economic Behavior and Organization, 128 . pp. 251-264. ISSN 0167-2681 Collusion price announcements experiments http://www.sciencedirect.com/science/article/pii/S0167268116300932 doi:10.1016/j.jebo.2016.05.014 doi:10.1016/j.jebo.2016.05.014 |
| spellingShingle | Collusion price announcements experiments Harrington, Joseph E. Hernan-Gonzalez, Roberto Kujal, Praveen The relative efficacy of price announcements and express communication for collusion: experimental findings |
| title | The relative efficacy of price announcements and express communication for collusion: experimental findings |
| title_full | The relative efficacy of price announcements and express communication for collusion: experimental findings |
| title_fullStr | The relative efficacy of price announcements and express communication for collusion: experimental findings |
| title_full_unstemmed | The relative efficacy of price announcements and express communication for collusion: experimental findings |
| title_short | The relative efficacy of price announcements and express communication for collusion: experimental findings |
| title_sort | relative efficacy of price announcements and express communication for collusion: experimental findings |
| topic | Collusion price announcements experiments |
| url | https://eprints.nottingham.ac.uk/33854/ https://eprints.nottingham.ac.uk/33854/ https://eprints.nottingham.ac.uk/33854/ |