Tacit Collusion: The Neglected Experimental Evidence

21 Pages Posted: 11 Oct 2007

See all articles by Christoph Engel

Christoph Engel

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Research on Collective Goods; University of Bonn - Faculty of Law & Economics; Erasmus University Rotterdam (EUR), Erasmus School of Law, Rotterdam Institute of Law and Economics, Students; Universität Osnabrück - Faculty of Law

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Date Written: September 2007

Abstract

Both in the US and in Europe, antitrust authorities prohibit merger not only if the merged entity, in and of itself, is no longer sufficiently controlled by competition. The authorities also intervene if, post merger, the market structure has changed such that tacit collusion becomes disturbingly more likely. It seems that antitrust neglects the fact that, for more than 50 years, economists have been doing experiments on this very question. Almost any conceivable determinant of higher or lower collusion has been tested. This paper standardises the evidence by way of a meta-study, and relates experimental findings as closely as possible to antitrust doctrine.

Keywords: Oligopoly, Coordinated Effects, Tacit Collusion, Merger Guidelines, Airtours, Experimental Markets

JEL Classification: D21, D43, K21, L13, L41

Suggested Citation

Engel, Christoph, Tacit Collusion: The Neglected Experimental Evidence (September 2007). MPI Collective Goods Preprint No. 2007/14, Available at SSRN: https://ssrn.com/abstract=1020889 or http://dx.doi.org/10.2139/ssrn.1020889

Christoph Engel (Contact Author)

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Universität Osnabrück - Faculty of Law

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