Price Coordination with Asymmetric Information Sharing: Theory and Evidence

58 Pages Posted: 6 Sep 2024 Last revised: 17 Oct 2024

See all articles by David P. Byrne

David P. Byrne

University of Melbourne

Nicolas de Roos

University of Liverpool; University of Sydney

Matthew S. Lewis

Clemson University - John E. Walker Department of Economics

Leslie M. Marx

Duke University - Fuqua School of Business, Economics Group

Xiaosong (Andy) Wu

University of Melbourne

Date Written: October 17, 2024

Abstract

Platform-based information sharing among ostensibly competing firms presents a challenge for antitrust authorities, as evidenced by, for example, issues surrounding the Informed Sources antitrust case and its price-sharing platform for retail gasoline stations. Even when anticompetitive effects of information sharing are clear, effective remedies may not be. We provide a theoretical model that offers guidance for disrupting anticompetitive coordination facilitated through a price-sharing platform. Our analysis highlights the potential ineffectiveness of removing only one participant from the platform and points to benefits from the combination of ensuring that (i) at least two substantive market participants do not have ready access to each other's prices and (ii) the costs of price leadership are sufficiently high.

Keywords: collusion, Information sharing, Price sharing platform, Collusion

JEL Classification: D22, D43, D83, L13

Suggested Citation

Byrne, David P. and de Roos, Nicolas and Lewis, Matthew S. and Marx, Leslie M. and Wu, Xiaosong, Price Coordination with Asymmetric Information Sharing: Theory and Evidence (October 17, 2024). Available at SSRN: https://ssrn.com/abstract=4923791 or http://dx.doi.org/10.2139/ssrn.4923791

David P. Byrne (Contact Author)

University of Melbourne ( email )

Level 4
111 Barry Street
Melbourne, Victoria 3010
Australia

HOME PAGE: http://sites.google.com/view/dprbyrne/

Nicolas De Roos

University of Liverpool ( email )

Chatham Street
Brownlow Hill
Liverpool, L69 7ZA
United Kingdom

University of Sydney ( email )

University of Sydney
Sydney NSW 2006
Australia

Matthew S. Lewis

Clemson University - John E. Walker Department of Economics ( email )

Clemson, SC 29634
United States

Leslie M. Marx

Duke University - Fuqua School of Business, Economics Group ( email )

Box 90097
Durham, NC 27708-0097
United States

Xiaosong Wu

University of Melbourne

Level 4
111 Barry Street
Melbourne, 3010
Australia

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