Research
Publications and Work in Progress
How Communication Makes the Difference between a Cartel and Tacit Collusion: A Machine Learning Approach (2023)
with Lisa Bruttel and Jana Friedrichsen
European Economic Review 152, 104331
This paper sheds new light on the role of communication for cartel formation. Using machine learning to evaluate free-form chat communication among firms in a laboratory experiment, we identify typical communication patterns for both explicit cartel formation and indirect attempts to collude tacitly. We document that firms are less likely to communicate explicitly about price fixing and more likely to use indirect messages when sanctioning institutions are present. This effect of sanctions on communication reinforces the direct cartel-deterring effect of sanctions as collusion is more difficult to reach and sustain without an explicit agreement. Indirect messages have no, or even a negative, effect on prices.
The Leniency Rule Revisited: Experiments on Cartel Formation with Open Communication (2021)
with Lisa Bruttel and Jana Friedrichsen
International Journal of Industrial Organization 76, 102728
The experimental literature on antitrust enforcement provides robust evidence that communication plays an important role for the formation and stability of cartels. We extend these studies through a design that distinguishes between innocuous communication and communication about a cartel, sanctioning only the latter. To this aim, we introduce a participant in the role of the competition authority, who is properly incentivized to judge the communication content and price setting behavior of the firms. Using this novel design, we revisit the question whether a leniency rule successfully destabilizes cartels. In contrast to existing experimental studies, we find that a leniency rule does not affect cartelization. We discuss potential explanations for this contrasting result.
Communicating Cartel Intentions (2024)
with Lisa Bruttel
Under Review at the Economic Journal
Communication and Collusion in Oligopoly Experiments: A Meta-Study using Machine Learning (2024)
with Lisa Bruttel
Mimeo
Equilibrium Selection in Infinitely Repeated Games with Communication (2024)
Available at SSRN: https://ssrn.com/abstract=4759938
Payoffs, Beliefs, and Cooperation in Infinitely Repeated Games (2024)
with Lisa Bruttel and Juri Nithammer
Available at SSRN: https://ssrn.com/abstract=4994196