The effect of industry structure and yardstick design on strategic behavior with yardstick competition: An experimental study

P.T. Dijkstra, M.A. Haan, M. Mulder

Research output: Working paperAcademic

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Abstract

We present an experiment on yardstick competition. Experimental firms set cost levels in each period and can communicate with each other in an attempt to increase the regulated price. We find that when market shares are heterogeneous, collusion is least frequent and prices are lowest. The number of players on a market also infuences prices, but to a lesser extent. Comparing across yardsticks, the discriminatory yardstick yields the lowest prices, while a best-practice yardstick yields the highest prices.
Original languageEnglish
Place of PublicationGroningen
PublisherUniversity of Groningen, SOM research school
Number of pages51
Volume13008-EEF
Publication statusPublished - 2013

Publication series

NameSOM Research Reports
PublisherUniversity of Groningen, SOM Research School
Volume13008-EEF

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