Refine
Has Fulltext
- yes (1) (remove)
Year of publication
- 2024 (1)
Document Type
- Working Paper (1) (remove)
Language
- English (1)
Is part of the Bibliography
- yes (1) (remove)
Keywords
- cartel (1)
- collusion (1)
- communication (1)
- experiment (1)
- machine learning (1)
Institute
While the economic harm of cartels is caused by their price-increasing effect, sanctioning by courts rather targets at the underlying process of firms reaching a price-fixing agreement. This paper provides experimental evidence on the question whether such sanctioning meets the economic target, i.e., whether evidence of a collusive meeting of the firms and of the content of their communication reliably predicts subsequent prices. We find that already the mere mutual agreement to meet predicts a strong increase in prices. Conversely, express distancing from communication completely nullifies its otherwise price-increasing effect. Using machine learning, we show that communication only increases prices if it is very explicit about how the cartel plans to behave.