Tacit vs. Overt Collusion Firm Asymmetries and Numbers: What’s the Evidence?

Stephen Davies, Matthew Olczak, Nov 01, 2008

It is conventional wisdom that collusion is more likely the fewer firms there are in a market and the more symmetric they are. This is often theoretically justified in terms of a repeated non-cooperative game. Although that model fits more easily with tacit than overt collusion, the impression sometimes given is that one model fits all. Moreover, the empirical literature offers few stylized facts on the most simple of questions how few are few and how symmetric is symmetric? This paper attempts to fill this gap while also exploring the interface of…

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