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Title:Semi-collusive advertising and pricing in experimental duopolies PDF Logo
Authors:Nicklisch, Andreas
Issue Date:2008
Series/Report no.:Preprints of the Max Planck Institute for Research on Collective Goods 2008,25
Abstract:This article tests experimentally whether a high degree of collusion on advertisement expenditures facilitate tacit price collusion in duopoly markets. Two environments are tested, in which the size of the spillover between advertising expenditures is varied. The results show that the competitiveness of advertising and prices are significantly higher when the advertising spillover is higher than the price spillover than when advertising spillover is lower than the price spillover. In the second environment, a higher degree of advertising collusion leads for experienced players to a higher degree of price collusion. In the first environment, players behave at most semi-collusively, that is, if at all, they collude on advertising, but compete over prices.
Subjects:Advertising
duopoly competition
experimental economics
price collusion
semi-collusive markets
JEL:D43
L13
M37
Document Type:Working Paper
Appears in Collections:Preprints of the Max Planck Institute for Research on Collective Goods

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