Institutional Authority and Collusion

Sonntag, Axel and Zizzo, Daniel John (2015) Institutional Authority and Collusion. Southern Economic Journal, 82 (1). pp. 13-37. ISSN 0038-4038

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    A 'collusion puzzle' exists by which, even though increasing the number of firms reduces the ability to tacitly collude, and leads to a collapse in collusion in experimental markets with three or more firms, in natural markets there are such numbers of firms colluding successfully. We present an experiment showing that, if managers are deferential towards an authority, firms can induce more collusion by delegating production decisions to middle managers and providing suitable informal nudges. This holds not only with two but also with four firms. We are also able to distinguish compliance effects from coordination effects.

    Item Type: Article
    Uncontrolled Keywords: collusion,cournot,oligopoly,authority,delegation,coordination,economics and econometrics ,/dk/atira/pure/subjectarea/asjc/2000/2002
    Faculty \ School: Faculty of Social Sciences > School of Economics
    Depositing User: Pure Connector
    Date Deposited: 09 Mar 2015 07:33
    Last Modified: 02 Aug 2018 16:31
    DOI: 10.1002/soej.12065

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