How communication makes the difference between a cartel and tacit collusion
- This paper sheds new light on the role of communication for cartel formation. Using machine learning to evaluate free-form chat communication among firms in a laboratory experiment, we identify typical communication patterns for both explicit cartel formation and indirect attempts to collude tacitly. We document that firms are less likely to communicate explicitly about price fixing and more likely to use indirect messages when sanctioning institutions are present. This effect of sanctions on communication reinforces the direct cartel-deterring effect of sanctions as collusion is more difficult to reach and sustain without an explicit agreement. Indirect messages have no, or even a negative, effect on prices.
| Author details: | Maximilian AndresORCiDGND, Lisa BruttelORCiDGND, Jana Friedrichsen |
|---|---|
| DOI: | https://doi.org/10.1016/j.euroecorev.2022.104331 |
| ISSN: | 0014-2921 |
| ISSN: | 1873-572X |
| Title of parent work (English): | European economic review |
| Subtitle (English): | a machine learning approach |
| Publisher: | Elsevier |
| Place of publishing: | Amsterdam |
| Publication type: | Article |
| Language: | English |
| Date of first publication: | 2023/11/09 |
| Publication year: | 2022 |
| Release date: | 2024/04/15 |
| Tag: | cartel; collusion; communication; experiment; machine learning |
| Volume: | 152 |
| Article number: | 104331 |
| Number of pages: | 18 |
| First page: | 1 |
| Last Page: | 18 |
| Organizational units: | Wirtschafts- und Sozialwissenschaftliche Fakultät / Wirtschaftswissenschaften / Fachgruppe Volkswirtschaftslehre |
| DDC classification: | 3 Sozialwissenschaften / 30 Sozialwissenschaften, Soziologie / 300 Sozialwissenschaften |
| 3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft | |
| Peer review: | Referiert |
| Publishing method: | Open Access / Hybrid Open-Access |
| License (German): |  CC-BY-NC-ND - Namensnennung, nicht kommerziell, keine Bearbeitungen 4.0 International |
