Online Appendix for 'Feedback and Contagion through Distressed Competition'

Abstract

This is the supplemental material for the paper titled “Feedback and Contagion through Distressed Competition” (Chen et al., 2023b). It includes a comprehensive summary of the direct empirical evidence on tacit collusion in the literature. It also provides empirical tests for key theoretical predictions, additional quantitative results, and the numerical algorithm. Moreover, a note on additional materials and literature discussions can be found in Chen et al. (2023a), which is available on the authors’ personal websites.

Keywords: Competition-distress feedback loop, Distress spillover, Predatory pricing, Price war, Profitability-leverage puzzle, Collusion

JEL Classification: C73, D43, E31, G3, L13, O33