Price Ceilings as Focal Points? An Experimental Test
| Author | : Hans-Theo Normann |
| Publisher | : |
| Total Pages | : 24 |
| Release | : 2007 |
| ISBN-10 | : OCLC:1290317601 |
| ISBN-13 | : |
| Rating | : 4/5 ( Downloads) |
Book Synopsis Price Ceilings as Focal Points? An Experimental Test by : Hans-Theo Normann
Download or read book Price Ceilings as Focal Points? An Experimental Test written by Hans-Theo Normann and published by . This book was released on 2007 with total page 24 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this experiment, we analyze whether price ceilings can have a collusive effect in laboratory markets. Our main interest is the focal-point hypothesis which says that a price ceiling may facilitate tacit collusion and lead to higher prices because it resolves a coordination problem inherent to collusion. Our results reject the focal-point hypothesis. Markets with price ceilings have lower prices than markets with unconstrained pricing. The static Nash equilibrium predicts the data accurately.
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