American Economic Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
Communication, Renegotiation, and the Scope for Collusion
American Economic Journal: Microeconomics
(pp. 247–78)
Abstract
We study the effect of communication in an experimental game where cooperation is consistent with equilibrium play if players share an understanding that cheating will be punished. Consistent with communication acting as a coordinating device, credible preplay threats to punish cheating are the most effective message to facilitate collusion. Promises to collude also improve cooperation. Credible threats do not occur in a treatment with a limited message space that permits threats of punishment. Contrary to some theoretical predictions, renegotiation possibilities facilitate collusion.Citation
Cooper, David J., and Kai-Uwe Kühn. 2014. "Communication, Renegotiation, and the Scope for Collusion." American Economic Journal: Microeconomics 6 (2): 247–78. DOI: 10.1257/mic.6.2.247Additional Materials
JEL Classification
- C71 Cooperative Games
- C73 Stochastic and Dynamic Games; Evolutionary Games; Repeated Games
- D83 Search; Learning; Information and Knowledge; Communication; Belief
- L12 Monopoly; Monopolization Strategies