Endogenous cartel formation: experimental evidence
Fonseca, Miguel A.
In a Bertrand-oligopoly experiment, firms choose whether or not to engage in cartel-like communication and, if so, they may get fined by a cartel authority. We find that the four-firm industries form cartels more often than the duopolies because they gain less from a hysteresis effect after cartel disruption.
NOTICE: this is the author’s version of a work that was accepted for publication in Economics Letters. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Economics Letters, Volume 125, Issue 2, November 2014, Pages 223–225. doi:10.1016/j.econlet.2014.09.014
This version previously issued as DICE Discussion Paper, No. 159 by Düsseldorf Institute for Competition Economics
Vol. 125, pp. 223 - 225