Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/71291
Authors: 
Clemens, Georg
Rau, Holger A.
Year of Publication: 
2013
Series/Report no.: 
DICE Discussion Paper 69
Abstract: 
This paper provides experimental evidence on the formation of partial cartels with endogenous coordination. Firms face a coordination challenge when a partial cartel is to be formed as every firm is better off if it is not inside the cartel but is a free-riding outsider. We introduce a three-stage mechanism with communication which facilitates the formation of a cartel and respectively allows the formation of a partial cartel. All-inclusive cartels are always formed. We find that partial cartels are frequently rejected out-of-equillibrium if moutside firms profit excessively from the formation of the cartel.
Subjects: 
Partial Cartels
Coordination
Communication
Experiment
JEL: 
C92
D02
L41
ISBN: 
978-3-86304-068-0
Document Type: 
Working Paper

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