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

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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.
Originele taal-2English
Plaats van productieGroningen
UitgeverUniversity of Groningen, SOM research school
Aantal pagina's51
Volume13008-EEF
StatusPublished - 2013

Publicatie series

NaamSOM Research Reports
UitgeverijUniversity of Groningen, SOM Research School
Volume13008-EEF

Keywords

  • Asymmetries
  • Yardstick Competition
  • Regulation
  • Experiment
  • Collusion

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