Lisa Bruttel (U Potsdam) gives a seminar on "Communicating Cartel Intentions"

Speaker: Lisa Bruttel (University of Potsdam)

 

Title: Communicating Cartel Intentions

When: Friday, April 12, 10:30am - 12:00pm

Where: Oskar-Morgenstern-Platz 1, 1090 Wien, Lecture hall 2, ground floor (map)

 

Abstract:

This paper provides experimental evidence on what exactly defines a price-fixing cartel. In a duopoly experiment, treatments vary whether firms are informed about their competitor's intention to communicate or not, and whether the availability of a communication channel depends on the firms' mutual willingness to communicate or not. We find that the information of the mutual willingness to communicate leads to a strong increase in prices, which doubles the cartel-facilitating effect of communication itself. Conversely, the information of a lack of mutual willingness to communicate completely nullifies its cartel-facilitating effect.