Collusion in Markets with Imperfect Price Information on Both Sides
Research output: Contribution to journal › Journal article › Research › peer-review
The paper considers tacit collusion in markets that are not fully transparent on both sides. Consumers only detect prices with some probability before deciding which firm to purchase from, and each firm only detects the other firm’s price with some probability. Increasing transparency on the producer side facilitates collusion, while increasing transparency on the consumer side makes collusion more difficult. Conditions are given under which increases in a common factor that affects transparency positively on both sides are pro-competitive. With two standard information technologies, this holds when firms are easier to inform than are consumers.
|Journal||Review of Industrial Organization|
|Publication status||Published - May 2017|
- Faculty of Social Sciences