Even when markets seem to alternate between collusive and non-collusive phases, the price differences are difficult to interpret since a breakdown in collusion may be caused by a demand decrease that would have reduced prices in any case. This makes the laboratory an ideal setting to study...

We report a policy experiment that illustrates a potential problem of using historical pass-through rates as a means of predicting the competitive consequences of projected firm-specific cost savings in antitrust contexts, particularly in merger analysis. The effects of cost savings on welfare...