Collusion through Price Ceilings? In Search of a Focal-Point Effect

D. Engelmann, W. Müller

Research output: Working paperDiscussion paperOther research output

Abstract

With this study we resume the search for a collusive focal-point effect of price ceilings in laboratory markets. We argue that market conditions in previous studies were unfavorable for collusion which may have been responsible for not finding such a focal-point effect. Our design aims at maximizing the likelihood of a focal-point effect. Nevertheless, our results again fail to support the focal-point hypothesis. Collusion is as unlikely in markets with a price ceiling as in markets with unconstrained pricing. Overall, the static Nash equilibrium predicts the data fairly accurately. We argue that this might warrant re-interpretation of field studies on anti-competitive effects of price ceilings.
Original languageEnglish
Place of PublicationTilburg
PublisherTILEC
Volume2008-036
Publication statusPublished - 2008

Publication series

NameTILEC Discussion Paper
Volume2008-036

Keywords

  • Collusion
  • competition policy
  • experimental economics
  • focal point

Fingerprint Dive into the research topics of 'Collusion through Price Ceilings? In Search of a Focal-Point Effect'. Together they form a unique fingerprint.

  • Cite this