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Is Voting for a Cartel a Sign of Cooperativeness?

Department of Economics, Business School, Middlesex University, The Burroughs, London NW4 4BT, UK
Academic Editors: Riccardo Ghidoni and Ulrich Berger
Games 2021, 12(2), 48;
Received: 25 March 2021 / Revised: 24 May 2021 / Accepted: 26 May 2021 / Published: 1 June 2021
(This article belongs to the Special Issue Pro-sociality and Cooperation)
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. View Full-Text
Keywords: social dilemma; oligopoly; non-binding promise; experimental economics social dilemma; oligopoly; non-binding promise; experimental economics
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MDPI and ACS Style

Gillet, J. Is Voting for a Cartel a Sign of Cooperativeness? Games 2021, 12, 48.

AMA Style

Gillet J. Is Voting for a Cartel a Sign of Cooperativeness? Games. 2021; 12(2):48.

Chicago/Turabian Style

Gillet, Joris. 2021. "Is Voting for a Cartel a Sign of Cooperativeness?" Games 12, no. 2: 48.

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