Price dynamics and collusion under short-run price commitments

Abstract

a b s t r a c tWe consider a dynamic homogeneous oligopoly in which firms set prices repeatedly. Theory predicts that short-run price commitments increase profits and may lead to less price stability. The experiments that we conducted provide support for the first effect and against the second effect when a random ending rule is applied. When a fixed ending rule is applied, we find no significant impact of short-run price commitments on profits and price stability.

Artificial Intelligence, Algorithmic Pricing, and Collusion

“…Section VII concludes with a brief discussion of the possible innocuous. Commitment may indeed facilitate coordination, as argued theoretically by Maskin and Tirole (1988) and experimentally by Leufkens and Peeters (2011). 6 Other papers that study reinforcement learning algorithms in a Cournot oligopoly include Kimbrough and Murphy (2009) and Siallagan, Deguchi, and Ichikawa (2013).…”

Oligopoly Experiments in the Current Millennium

“…Laboratory studies on price competition have reported evidence of price cycles (see Davis and Wilson, , for an overview of pre‐2000 studies). Bruttel () and Leufkens and Peeters (), for example, find that subjects who alternately set prices typically first collude or try to do so, then enter a phase of undercutting, and after a number of low‐price periods turn back to collusion. Interestingly, similar patterns seem to appear in simultaneous‐move experiments (see Durham et al ., ; Bruttel, ; Peeters and Strobel, ; Davis, ; Leufkens and Peeters, ) which suggests that some inertia is present also in simultaneous‐move settings.…”

Detekcja równowagi zmowy w branży z wykorzystaniem analizy falkowej – model teoretyczny

“…Teoretyczne modele zmowy jawnej lub milczącej bazujące na właściwych modelach gier (najczęściej supergier o zróżnicowanych założeniach informacyjnych, kodach kar, zróżnicowanej asymetrii graczy oraz wkomponowanych dodatkowych zaburzeniach otoczenia, patrz np. : Athey, Bagwell, 2001;Haltiwanger, Harrington, 1991;Rotemberg, Saloner, 1986;Green, Porter, 1984;Knittel, Lepore, 2010;Leufkens, Peeters, 2009;Yuanzhu, Wright, 2009) są dobrze określone jako hipotezy badawcze dotyczące zachowania graczy 2 . Niestety empiryczna weryfi kacja takich modeli nastręcza ogromnych trudności.…”