Communication, Renegotiation, and the Scope for Collusion

Cooper, David J. and Kühn, Kai-Uwe (2014) Communication, Renegotiation, and the Scope for Collusion. American Economic Journal: Microeconomics, 6 (2). pp. 247-278. ISSN 1945-7669

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We study the effect of communication in an experimental game where cooperation is consistent with equilibrium play if players share an understanding that cheating will be punished. Consistent with communication acting as a coordinating device, credible preplay threats to punish cheating are the most effective message to facilitate collusion. Promises to collude also improve cooperation. Credible threats do not occur in a treatment with a limited message space that permits threats of punishment. Contrary to some theoretical predictions, renegotiation possibilities facilitate collusion.

Item Type: Article
Faculty \ School: Faculty of Social Sciences > School of Economics
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Depositing User: Pure Connector
Date Deposited: 16 Apr 2018 14:30
Last Modified: 13 May 2023 00:30
DOI: 10.1257/mic.6.2.247

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