Does Knowledge About the Presence of a Maverick in the Market Influence the Price Level?

Abstract information

The experiment presented in this video constructs a heterogeneous duopoly of firms – on the one hand a firm with an internal structure leading to low prices, and on the other hand a firm acting collusively in price-setting. MICHAEL KURSCHILGEN explains that transparency about the competitor’s internal structure hampers tacit collusion: If the collusive firm is aware of the other firm’s internal structure, the firms will compete on prices and prices will decline; otherwise, both firms will collude on price-setting and prices will rise.

DOI:

https://doi.org/10.21036/LTPUB10021

Researcher

Michael Kurschilgen is Assistant Professor of Managerial Economics at the Technical University Munich, Germany. He received his doctoral degree in economics from Friedrich Schiller University Jena before becoming a Postdoctoral Reserach Fellow at the Max Planck Institute for Research on Collective Goods in Bonn. Kurschilgen’s area of research is the interface between economics, social psychology, and law. He is a member of the Young Academy of Sciences and Humanities of the German state of North Rhine-Westphalia.

Institution information

Technical University of Munich (Technische Universität München)

"Technische Universität München (TUM) is one of Europe’s top universities. It is committed to excellence in research and teaching, interdisciplinaryeducation and the active promotion of promising young scientists. The university also forges strong links with companies and scientific institutionsacross the world. TUM was one of the first universities in Germany to be named a University of Excellence. Moreover, TUM regularly ranks among the best European universities in international rankings." ( Source )

Technical University of Munich (Technische Universität München)

Original Publication

Partnerships and Consortia: The Effect of Sharing Rules on Oligopolistic Pricing