"A Note on Renegotiation in Repeated Bertrand Duopolies"
(Co-author: Erik Wengström) Economics Letters 2007, Vol 95, No 3, pp 398-401 Abstract: Weak Renegotiation-Proofness (WRP) singles out marginal cost pricing as a unique pure-strategy equilibrium of the infinitely repeated Bertrand duopoly. We show that, with a discrete strategy space, WRP does not eliminate any relevant subgame perfect equilibrium outcome.
"On the Role of Patience in Collusive Bertrand Duopolies"
forthcoming in Economics Letters Abstract: This paper analyzes the role of patience in a repeated Bertrand duopoly where firms bargain over which collusive price and market share to implement. It is shown that the least patient firm's market share is not monotone in its own discount factor.
"Endogenous Communication and Tacit Coordination in Market Entry Games - an explorative experimental study"
(Co-authors: Hans Carlsson and Håkan Holm) Department of Economics Working Paper Series 2006:12. Abstract: Coordination problems can be solved tacitly or explicitly by communication. In the latter (but not in the former case) evidence of incriminating intentions of coordination might be detected by a third party who can use it in a trial. This paper investigates experimentally if and to what extent entry cost asymmetries may serve as tacit coordination devices in market entry games. This is done with and without the possibility of costly communication.
"Bargaining in Collusive Markets"
Department of Economics Working Paper Series 2006:21. Abstract: In this paper we investigate collusion in an infinitely repeated Bertrand duopoly where firms have different discount factors. In order to study how a collusive agreement is reached we model the equilibrium selection as an alternating-offer bargaining game. The selected equilibrium has several appealing features: First, it is efficient in the sense that it entails immediate agreement on the monopoly price. Second, the equilibrium shows how discount factors affect equilibrium market shares. A comparative statics analysis on equilibrium market shares reveals that changes in discount factors may have ambiguous effects on market shares.
"Communication and Renegotitation in Two-stage Games"
(Co-author: Erik Wengström) Department of Economics Working Paper Series 2007:4. Abstract: In this paper we experimentally investigate cooperation and non-binding communication in a two-stage game. The game has a subgame perfect equilibrium where subjects can sustain cooperation in the first stage by threatening to punish deviant behavior in the second stage. In contrast, renegotiation-proofness rules out cooperation in the first stage when intra-play communication is possible. Our results provide some support for this argument. We observe less cooperation in the first stage when intra-play communication is possible. Moreover, pre-play communication only has a significant impact on actions when intra-play communication is not allowed. The experimental design also enables us to perform an in-depth analysis of communication.
Work in Progress
|Department of Economics School of Economics and Management Lund University|