Information and Cost Asymmetry in Experimental Duopoly Markets
journal contributionposted on 2021-11-15, 21:30 authored by Charles F. Mason, Owen R. Phillips, C. Nowell
We analyze data from experimental duopoly markets to assess the role information plays in facilitating collusion. In these markets, profitability can be common knowledge or private information. Market outputs are estimated in structures with symmetric and asymmetric costs under the two information conditions. Symmetric markets are more cooperative when profitability is common knowledge; asymmetric market outputs are unaffected by information differences. However, common knowledge in asymmetric markets increases the share of the output produced by the low-cost producer, and therefore increases industry efficiency.
PublisherUniversity of Wyoming. Libraries
Journal titleReview of Economics and Statistics
CollectionFaculty Publications - Economics
- Library Sciences - LIBS