|Cartel Power |February 3 |
| |2012 |
|We report on a cartel power experiment. Subjects had to play the Rock Paper Scissor Game with |Rock Paper Scissor Game |
|induced values for wins, draws and losses. In this experiment efficient cartel strategy is to | |
|arrange a draw. Furthermore we investigated the influence of communication and pay-off uncertainty. | |
|Communication leads to more cartel power and the influence of pay-off uncertainty is unclear, | |
|although it seems to attribute to the theory that uncertainty leads to less cartel power. | |
Cartels are an important subject of economic research. In microeconomics there has been a debate going on for decades, competition policies are eager to detect and punish companies who collaborate and restrict competition. Still not much research in the lab has been done. Normal game theorists often do research to cartels, however behavioral economists did not paid that much attention to this phenomenon.
In this paper the research focuses on behavior and cartels. Behavioral economics is an important aspect in forming a cartel, because initially people have to interact before a cartel is made. With interaction of people trust is an essential matter. Social interaction and trust are main subjects in the field of behavioral economics. Trust is also a common factor for cartel power (Levenstein and Suslow, 2006). In this research we focus on aspects that could influence trust. These aspects are communication and pay-off uncertainty. Therefore our research...