Industry structure and collusion with uniform yardstick competition: Theory and experiments
Abstract
For an industry that is subject to uniform yardstick regulation, we study cartel stability and the impact of cartels on the regulated price. In a theoretical model, an increase in the number of symmetric firms may facilitate collusion. Our laboratory experiment suggests that this effect is even stronger than what theory predicts. Theory predicts that firm-size heterogeneity hinders collusion, but leads to higher regulated prices if firms do not...
Paper Details
Title
Industry structure and collusion with uniform yardstick competition: Theory and experiments
Published Date
Jan 1, 2017
Volume
50
Pages
1 - 33
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