Is voting for a cartel a sign of cooperativeness?

Gillet, Joris ORCID logoORCID: https://orcid.org/0000-0002-3780-3224 (2021) Is voting for a cartel a sign of cooperativeness? Games, 12 (2) , 48. pp. 1-10. ISSN 2073-4336 [Article] (doi:10.3390/g12020048)

[img]
Preview
PDF - Published version (with publisher's formatting)
Available under License Creative Commons Attribution 4.0.

Download (971kB) | Preview

Abstract

This paper tests the hypothesis that a (partial) reason why cartels—collective but costly and non-binding price agreements—lead to higher prices in a Bertrand oligopoly could be because of a selection effect: decision-makers who are willing to form price agreements are more likely to be less competitive and pick higher prices in general. To test this hypothesis we run an experiment where participants play two consecutive Bertrand pricing games: first a standard version without the opportunity to form agreements; followed by a version where participants can vote whether to have a (costly) non-binding agreement as a group to pick the highest number. We find no statistically significant difference between the numbers picked in the first game by participants who vote for and against an agreement in the second game. We do confirm that having a non-binding agreement to cooperate leads to higher numbers being picked on average. Both participants who voted for and against the agreement increase the number they pick in situations with an agreement. However, this effect is bigger for participants who voted in favour.

Item Type: Article
Additional Information: This article belongs to the Special Issue Pro-sociality and Cooperation.
Keywords (uncontrolled): social dilemma, oligopoly, non-binding promise, experimental economics
Research Areas: A. > Business School > Economics
Item ID: 33345
Notes on copyright: © 2021 by the author.
Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https://creativecommons.org/licenses/by/4.0/).
Useful Links:
Depositing User: Joris Gillet
Date Deposited: 02 Jun 2021 07:33
Last Modified: 08 Jun 2021 10:00
URI: https://eprints.mdx.ac.uk/id/eprint/33345

Actions (login required)

View Item View Item

Statistics

Activity Overview
6 month trend
23Downloads
6 month trend
53Hits

Additional statistics are available via IRStats2.