From the perspective of competitors, competition may be modeled as a prisoner’s dilemma. Setting the monopoly price is cooperation, undercutting is defection. Jointly, competitors are better off if both are faithful to a cartel. Individually, profit is highest if only the competitor(s) is...

Sanctions are often so weak that a money maximizing individual would not be deterred. In this paper I show that they may nonetheless serve a forward looking purpose if sufficiently many individuals are averse against advantageous inequity. Using the Fehr/Schmidt model (QJE 1999) I define three...

Hardly any antitrust lawyer would deny that antitrust needs solid foundations in economics. Antitrust authorities hire economists, if they do not even haven the position of a chief economist. Antitrust not only capitalises on economic theory, but it is equally sensitive to empirical studies, be...

A cartel is socially not desirable. But is it a normative problem? And has merger control reason to be concerned about tacit collusion? Neither is evident once one has seen that the members of a cartel face a problem of strategic interaction. It is routinely analysed in terms of game theory....

Both in the US and in Europe, antitrust authorities prohibit merger not only if the merged entity, in and of itself, is no longer sufficiently controlled by competition. The authorities also intervene if, post merger, the market structure has changed such that "tacit collusion" or "coordinated...

Antitrust authorities all over the world are concerned if a particularly aggressive competitor, a "maverick", is bought out of the market. Yet there is a lack of theoretical justification. One plausible determinant of acting as a maverick is behavioral: the maverick derives utility from acting...

Both in the US and in Europe, antitrust authorities prohibit merger not only if the merged entity, in and of itself, is no longer sufficiently controlled by competition. The authorities also intervene if, post merger, the market structure has changed such that tacit collusion becomes...

Oligopoly has been among the first topics in the experimental economics. Over half a century, some 150 papers have been published. Each individual paper was interested in demonstrating one effect. But in order to do so, experimenters had to specify many more parameters. That way they have...

The paper studies the assessment of private damages that the cartelization of a market imposes on buyers in that market and, possibly, on the buyers' own customers in further market downstream. Abstracting from procedural problems and focussing on conceptual issues, the paper argues that damages...

The European Commission is working on a revision of its Guidelines on Research and Development Agreements. On this occasion, this note surveys the existing experimental evidence. Experiments add a number of additional arguments to the normative assessment. R&D agreements have a much smaller...