學術研究

Cheating and Compensation in Price-Fixing Cartels

日期 2021-01-11 (週一)
時間 10:30 AM
地點 Conference Room B110
主持人 Professor Chih-Chun Yang
演講者 Mr. Jihwan Do
演講者簡介 Mr. Do will receive his Ph.D. in Economics from University of Rochester in 2021. His research fields are Game Theory, Industrial Organization, and Contract Theory. He is applying for a position of the Institute of Economics, Academia Sinica now.
摘要 While deliberate cheating and inter-firm compensation are often observed in the real-world cartels, existing literature fails to explain both in a unified framework. This paper aims to provide a theoretical explanation of “cheating and compensation on-path of play" using a canonical model of price-fixing collusion. The novel mechanism relies on firms playing mixed strategies allowing for coordination on monopoly price and price-cutting to happen with positive probability, together with a compensation scheme that punishes price-cutters. The mechanism is optimal in a restricted class of equilibria, and such price-cutting and compensation are necessary parts for any symmetric collusive equilibrium.