Abstract

http://ssrn.com/abstract=1405307
 


 



Is a Cartel Just an Ordinary Prisoner's Dilemma?


Christoph Engel


Max Planck Institute for Research on Collective Goods; University of Bonn - Faculty of Law & Economics; Universität Osnabrück - Faculty of Law

May 18, 2009

Gruter Institute Squaw Valley Conference 2009: Law, Behavior & the Brain

Abstract:     
Ever since the heyday of the Chicago School, antitrust intervention has been under attack. One of the stronger counter-arguments is behavioural. Models predicting the absence of a social problem rely on the assumption that all agents are prevoyant maximisers of profit. Many experiments have shown that subjects are more likely to collude. However, other experimental findings point to behavioural forces mitigating the social detriment. Subjects collude less if they know they inflict harm on others. And they cooperate more if the structurally identical game is framed neutrally. Arguably this setting does not give them a chance to activate their world knowledge on the undesirability of collusion. The experiment to be presented puts these two forces to the direct test: externalities, and normativity. The main finding is this: only normativity helps. Society cannot dispense of antitrust intervention.

working papers series





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Date posted: May 16, 2009  

Suggested Citation

Engel, Christoph, Is a Cartel Just an Ordinary Prisoner's Dilemma? (May 18, 2009). Gruter Institute Squaw Valley Conference 2009: Law, Behavior & the Brain. Available at SSRN: http://ssrn.com/abstract=1405307

Contact Information

Christoph Engel (Contact Author)
Max Planck Institute for Research on Collective Goods ( email )
Kurt-Schumacher-Str. 10
D-53113 Bonn, 53113
Germany
+049 228 914160 (Phone)
+049 228 9141655 (Fax)
HOME PAGE: http://www.coll.mpg.de/engel.html

University of Bonn - Faculty of Law & Economics
Postfach 2220
D-53012 Bonn
Germany
University of Osnabrueck - Faculty of Law
c/o Prof. Dr. Schneider
Osnabruck, D-49069
Germany
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