Equilibrium Models of Tacit Collusion in Oligopoly Experiments with Price-Setting Firms
1980-10
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Equilibrium Models of Tacit Collusion in Oligopoly Experiments with Price-Setting Firms
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1980-10
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Center for Economic Research, Department of Economics, University of Minnesota
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Working Paper
Abstract
In a noncooperative oligopoly with price-setting firms, tacit
collusion is present when prices and profits exceed the "competitive"
levels determined by a Nash equilibrium in prices. Such tacit collusion
has been observed in oligopoly experiments with product differentiation.
This paper discusses several equilibrium models of tacitly
collusive behavior, including a "consistent conjectures equilibrium"
which was recently proposed by Bresnahan (1980). The payoff parameters
for some previously reported oligopoly experiments are used to compute
the price predictions for alternative equilibrium theories. The consistent
conjectures equilibrium provides the best explanation of the
pattern of reported price averages.
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Discussion Paper
138
138
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Holt, C.A. Jr., (1980), "Equilibrium Models of Tacit Collusion in Oligopoly Experiments with Price-Setting Firms", Discussion Paper No. 138, Center for Economic Research, Department of Economics, University of Minnesota.
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Holt, Charles A. Jr.. (1980). Equilibrium Models of Tacit Collusion in Oligopoly Experiments with Price-Setting Firms. Retrieved from the University Digital Conservancy, https://hdl.handle.net/11299/55043.
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