产业组织9_-_Price_Fixing_and_Repeated_Games.pptVIP

Infinitely or Indefinitely Repeated Games (5) Infinitely or Indefinitely Repeated Games (6) Two objections to trigger strategies : Early detection. Swift punishment. In most cases, detection and punishment take time. Delay in detection increases incentive to cheat. Mistake innocent firm as cheaters. Modified trigger strategies as possible solution. Infinitely or Indefinitely Repeated Games (7) Folk Theorem Suppose that an infinitely repeated game has a set of payoffs that exceed the one-shot Nash equilibrium payoffs for each and every firm. Then any set of feasible payoffs that are preferred by all firms to Nash equilibrium payoffs can be supported as subgame perfect equilibria for the repeated game for some discount rate sufficiently close to unity. The Role of the Antitrust Authorities (1) The Role of the Antitrust Authorities (2) The Role of the Antitrust Authorities (3) Tools which antitrust authorities could use to deter formation of cartels, Imposing Fines. Improving the possibility of successful prosecution. Antitrust authorities should find the best combination of the tools. Empirical Application : Estimating the Effects of Price-Fixing (1) How much is the fine? Estimation is needed. Kwoka (1997) estimated the price impact of a long-running cartel to rig prices in a particular set of real estate auctions held in the District of Columbia. The auction is processed in public auction, and then in private auction among cartel members. Cartel members will bid low prices, and discouraged biddings from non-cartel members. Empirical Application : Estimating the Effects of Price-Fixing (2) Empirical Application : Estimating the Effects of Price-Fixing (3) Findings : Bid-rigging cartels led to public auction-winning price in the range of 54% - 67% of true value of the auctioned properties. Bid-rigging cartels suppressed public auction-winning price by 33% to 46%. Lecture Notes 9 Price Fixing and Repeated Games KENNY TEGUH PRIBADI BNU–HKBU UNITED INTERNAT