Institutional Authority and Collusion

Sonntag, Axel; Zizzo, Daniel John

doi:10.2139/ssrn.2387743

SSRN Journal

2014

DOI: 10.2139/ssrn.2387743

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Institutional Authority and Collusion

Axel Sonntag

Daniel John Zizzo

Abstract: A 'collusion puzzle' exists by which, even though increasing the number of firms reduces the ability to tacitly collude, and leads to a collapse in collusion in experimental markets with three or more firms, in natural markets there are such numbers of firms colluding successfully.We present an experiment showing that, if managers are deferential towards an authority, firms can induce more collusion by delegating production decisions to middle managers and providing suitable informal nudges. This holds not onl… Show more

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Cited by 3 publications

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“…In contrast to a vertical notion of accountability, e.g. towards a line manager (e.g Sonntag and Zizzo, 2015 ),. in this paper, we consider a horizontal notion of accountability, i.e., peer effects among co-workers (e.g Mas and Moretti, 2009 )…”

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Personal accountability and cooperation in teams

Sonntag

Zizzo

2019

Journal of Economic Behavior & Organization

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In a real effort lab and online team production experiment, we analyze exerted effort under different conditions of individual accountability. In a repeated setting, we vary the degree to which production can be directly traced back to a collaborator's individual or randomly drawn effort level, respectively. We find that individuals produce much less and the decline of effort over time is significantly steeper under high as compared to low and endogenously chosen personal accountability. While endogenous accountability provides an option for monitoring others, it does not force subjects to learn about their underperforming peers, thus limiting the typical decline of contributions over time. We conclude that accountability one step removed may be an interesting institutional setting for repeated collaborations in contexts where low accountability for political, social or legal reasons is not a viable option.

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Personal accountability and cooperation in teams

Sonntag

Zizzo

2019

Journal of Economic Behavior & Organization

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Tacit Collusion: The Neglected Experimental Evidence

Engel¹

2015

J Empirical Legal Studies

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Both in the United States and in Europe, antitrust authorities prohibit merger not only if the merged entity, in and of itself, is no longer sufficiently controlled by competition, but also if, post merger, the market structure has changed such that “tacit collusion” or “coordinated effects” become disturbingly more likely. It seems that antitrust neglects the fact that for more than 50 years, economists have been doing experiments on this very question. Almost any conceivable determinant of higher or lower collusion has been tested. This article standardizes the evidence by way of a meta‐study, and relates experimental findings as closely as possible to antitrust doctrine.

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Responding to (Un)Reasonable Requests

2016

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E S Responding to (Un)Reasonable RequestsIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author.IZA Discussion Paper No. 10189 September 2016 ABSTRACTResponding to (Un)Reasonable Requests *We consider the notions of static and dynamic reasonableness of requests in a trust game experiment. We vary systematically the experimental norm of what is expected from trustees to return to trustors, both in terms of level of each request and in terms of sequence of the requests. Static reasonableness matters in a self-biased way, in the sense that low requests justify returning less but high requests tend to be ignored. Dynamic reasonableness also matters, in the sense that, if requests keep increasing, trustees return less than if requests of different size are presented in random or decreasing order. Requests never systematically increase trustworthiness, but may decrease it.JEL Classification: C91, D01, D03, D63

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Institutional Authority and Collusion

Cited by 3 publications

References 39 publications

Personal accountability and cooperation in teams

Personal accountability and cooperation in teams

Tacit Collusion: The Neglected Experimental Evidence

Responding to (Un)Reasonable Requests

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