Template-Type: ReDIF-Paper 1.0 Series: Tinbergen Institute Discussion Papers Creation-Date: 2015-05-10 Number: 15-054/I Author-Name: Francisco Gomez-Martin Author-Workplace-Name: University of Amsterdam, the Netherlands Author-Name: Sander Onderstal Author-Workplace-Name: University of Amsterdam, the Netherlands Author-Name: Joep Sonnemans Author-Workplace-Name: University of Amsterdam, the Netherlands Title: Firm-Specific Information and Explicit Collusion in Experimental Oligopolies Abstract: Published in the 'European Economic Review'.
We experimentally study the effect of information about competitorsí actions on cartel stability and firmsí incentives to form cartels in Cournot markets. As in previous experiments, markets become very competitive when individualized information is available and participants cannot communicate. In contrast, when communication is possible, results reverse: Markets become less competitive and cartels become more stable when individualized information is available. We also observe that the extra profits that firms obtain thanks to the possibility to communicate are higher when individualized information is present, suggesting that firms have greater incentives to form cartels in that situation. Classification-JEL: C92, L13, L41 Keywords: Cournot oligopoly; Cartels; Information; Experiments File-Url: http://papers.tinbergen.nl/15054.pdf File-Format: application/pdf File-Size: 431849 bytes Handle: RePEc:tin:wpaper:20150054