Tacit Collusion in Repeated Contests with Noise

11 Pages Posted: 19 Jul 2015

See all articles by James Boudreau

James Boudreau

Kennesaw State University - Department of Economics and Finance; University of Texas Rio Grande Valley (UTRGV) (Formerly University of Texas-Pan American)

Nicholas Shunda

University of Redlands

Date Written: July 17, 2015

Abstract

We analyze the determinants of tacit collusion in an infinitely repeated contest with noise in the contest success function. Sustaining collusion via Nash reversion strategies is easier the more noise there is, and is more difficult the larger is the contest's prize value. An increase in the contest's number of players can make sustaining collusion either more or less difficult.

Keywords: Contest, Conflict, Collusion, Noise.

JEL Classification: C72, C73, D72, D74.

Suggested Citation

Boudreau, James and Shunda, Nicholas, Tacit Collusion in Repeated Contests with Noise (July 17, 2015). Available at SSRN: https://ssrn.com/abstract=2632707 or http://dx.doi.org/10.2139/ssrn.2632707

James Boudreau

Kennesaw State University - Department of Economics and Finance ( email )

United States

HOME PAGE: http://https://sites.google.com/site/boudreaujw/

University of Texas Rio Grande Valley (UTRGV) (Formerly University of Texas-Pan American) ( email )

1201 W. University Drive
Edinburg, TX 78541
United States

Nicholas Shunda (Contact Author)

University of Redlands ( email )

1200 East Colton Avenue
PO Box 3080
Redlands, CA 92373-0999
United States
909-748-8569 (Phone)
909-335-5387 (Fax)

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