Speaker: Christian Schultz, University of Copenhagen

Title: Collusion in markets with imperfect price information on both sides

Abstract: The paper considers tacit collusion in markets which are not fully transparent on both sides. Consumers only detect prices with some probability before deciding which fi?rm to purchase from, and each ?firm only detects the other fi?rm'?s price with some probability. Increasing transparency on the producer side facilitates collusion, while increasing transparency on the consumer side makes collusion more difficult. Conditions are given under which increases in a common factor, affecting transparency positively on both sides, are pro-competitive. With two standard information technologies, this is so, when ?firms are easier to inform than consumers.

Organizer: Allan Sørensen