Economics, Econometrics and Finance
4 years ago

Firms Collude to Raise Prices, Hurting Consumers

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Other publications TiSEM
'Be Nice Unless it Pays to Fight' : A New Theory of Price Determination with Implications for Competition Policy
Jan Boone

Paper Summary

The article presents a new theory on how prices are determined in markets. It uses a pricing game to show that when firms are similar, prices are higher. Also, when a new firm enters the market or an existing firm becomes more efficient, prices go up. This theory helps understand how price leadership, joint dominance, and efficiency offenses work in industries.

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