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Collusion among many firms: The disciplinary power of targeted punishment

Roux, Catherine and Christian, Thöni. (2015) Collusion among many firms: The disciplinary power of targeted punishment. Journal of economic behavior & organization, 116. pp. 83-93.

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Official URL: http://edoc.unibas.ch/39439/

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Abstract

We explore targeted punishment as an explanation for collusion among many firms. We run a series of Cournot oligopoly experiments with and without the possibility of targeting punishment at specific market participants. In markets with two, four, six, and eight firms, we analyze to what extent targeted punishment helps firms to restrict output. We find that targeted punishment leads to more collusion across all markets. Furthermore, beyond two firms, this collusive effect turns out to be even stronger in markets with more competitors, suggesting a reversal of the conventional wisdom that collusion is easier with fewer firms.
Faculties and Departments:06 Faculty of Business and Economics > Departement Wirtschaftswissenschaften > Professuren Wirtschaftswissenschaften > Industrial Organization and Regulation of Energy Markets (Roux)
UniBasel Contributors:Roux, Catherine
Item Type:Article, refereed
Article Subtype:Research Article
Publisher: Elsevier Sequoia S.A
ISSN:0167-2681
Note:Publication type according to Uni Basel Research Database: Journal article
Identification Number:
Last Modified:28 Jun 2018 09:47
Deposited On:27 Apr 2016 06:40

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