Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/266561 
Year of Publication: 
2023
Citation: 
[Journal:] European Economic Review [ISSN:] 1873-572X [Volume:] 152 [Article No.:] 104331 [Publisher:] Elsevier [Place:] Amsterdam [Year:] 2023 [Pages:] --
Publisher: 
Elsevier, Amsterdam
Abstract: 
This paper sheds new light on the role of communication for cartel formation. Using machine learning to evaluate free-form chat communication among firms in a laboratory experiment, we identify typical communication patterns for both explicit cartel formation and indirect attempts to collude tacitly. We document that firms are less likely to communicate explicitly about price fixing and more likely to use indirect messages when sanctioning institutions are present. This effect of sanctions on communication reinforces the direct cartel-deterring effect of sanctions as collusion is more difficult to reach and sustain without an explicit agreement. Indirect messages have no, or even a negative, effect on prices.
Subjects: 
cartel
collusion
communication
machine learning
experiment
JEL: 
C92
D43
L41
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Article
Document Version: 
Published Version

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