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Chapter 29 Empirical Models of Entry and Market Structure

Berry, Steven; Reiss, Peter - In: Handbook of industrial organization : volume 3, (pp. 1845-1886). 2007

This chapter surveys empirical models of market structure. We pay particular attention to equilibrium models that interpret cross-sectional variation in the number of firms or firm turnover rates. We begin by discussing what economists can in principle learn from models with homogeneous...

Persistent link: https://www.econbiz.de/10014024587

Strategic choice of price-setting algorithms

Buchali, Katrin; Grüb, Jens; Muijs, Matthias; … - 2023

Recent experimental simulations have shown that autonomous pricing algorithms are able to learn collusive behavior and … chose between different pricing rules. Our simulations show that when both firms use a learning algorithm, the outcome is … meeting competition clauses yield higher payoffs compared to Q-learning algorithms. …

Persistent link: https://www.econbiz.de/10013534374

Collusive agreements in vertically differentiated markets

Marini, Marco A. - 2017

This paper introduces a number of game-theoretic tools to model collusive agreements among firms in vertically differentiated markets. I firstly review some classical literature on collusion between two firms producing goods of exogenous different qualities. I then extend the analysis to a...

Persistent link: https://www.econbiz.de/10011660599

Collusion by Algorithm : Does Better Demand Prediction Facilitate Coordination Between Sellers?

Miklós-Thal, Jeanine - 2018

We build a game-theoretic model to examine how better demand forecasting due to algorithms, machine learning and artificial intelligence affects the sustainability of collusion in an industry. We find that while better forecasting allows colluding firms to better tailor prices to demand...

Persistent link: https://www.econbiz.de/10012910026

Passive backward acquisitions and downstream collusion

Shekhar, Shiva; Thomes, Tim Paul - 2020

' ability to collude in a dynamic game of price competition with homogeneous goods. We find that passive backward acquisitions …

Persistent link: https://www.econbiz.de/10012297609

Strategic leaks in first-price auctions and tacit collusion : the case of spying and counter-spying

Fan, Cuihong; Chŏn, Pyŏng-hŏn; Wolfstetter, Elmar - 2021

We analyze strategic leaks due to spying out a rival’s bid in a first-price auction. Such leaks induce sequential bidding, complicated by the fact that the spy may be a counterspy who serves the interests of the spied at bidder and reports strategically distorted information. This ambiguity...

Persistent link: https://www.econbiz.de/10012507333

How the design of cartel fines affects prices : evidence from the lab

Engilbertsson, Sindri; Onderstal, Sander; Treuren, Leonard - 2025

Competition authorities impose substantial penalties on firms engaging in illegal pricefixing. We examine how basing … test these predictions in a laboratory experiment where subjects can form cartels, which allows them to discuss pricing at … predictions, cartel incidence remains unchanged across regimes. Our results suggest competition authorities could improve …

Persistent link: https://www.econbiz.de/10015211665

Algorithmic price recommendations and collusion : experimental evidence

Hunold, Matthias; Werner, Tobias - 2023

theoretical framework and derive two algorithms that recommend collusive pricing strategies. Utilizing a laboratory experiment, we …

Persistent link: https://www.econbiz.de/10014442786

On the Stability of Multimarket Collusion in Price-Setting Supergames

Bond, Eric W. - 2012

In this paper we examine how trade liberalization affects collusive stability in the context of multimarket interactions. The model we consider is a segmented-markets duopoly in which price-setting firms pool their incentive constraints across markets to sustain their most collusive outcome. We...

Persistent link: https://www.econbiz.de/10013113914

Stochastic-Share Contests

Brookins, Philip; Smyth, Andrew - 2022

This paper proposes the Stochastic-Share Contest, a novel contest format that combines the Winner-Take-All Contest and the Proportional-Prize Contest, with the former nesting the latter two as special cases. Motivated by the experimental contest literature, we include risk aversion and a "joy of...

Persistent link: https://www.econbiz.de/10014080727