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on Industrial Organization |
| By: | Ivan Conjeaud; Gaspard Abel; Argyris Kalogeratos |
| Abstract: | This paper investigates the effect of asynchrony in agents' updates in the emergence of algorithmic collusion. We present a continuous-time model for algorithmic collusion in which two firms use $Q$-learning algorithms to set prices asynchronously in a Bertrand duopoly. The firms update their prices at times dictated by a Poisson clock. By controlling the extent of agents' asynchrony, we run extensive numerical experiments with three specifications of the algorithm to investigate the emergence of algorithmic collusion. The strength of collusion is measured by a standard collusion index, as well as by automatically detecting the reward-punishment schemes. This is done by recording a large number of algorithms' reactions to unilateral price cuts and comparing them with the reactions of untrained algorithms. Our findings indicate that asynchrony hampers collusion, especially when the algorithms are stateless. When they condition on their competitor's previous prices, the sensitivity of algorithmic collusion to asynchrony varies depending on the type of information they have access to. The implications of these results for the regulation of algorithmic pricing are discussed. |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2608.01406 |
| By: | Felix Montag |
| Abstract: | Current enforcement practice does not consider how mergers alter the merging parties' incentives to petition for trade protection. I document mergers between domestic producers across jurisdictions that are followed by tariff petitions. I develop a model to characterize the trade-policy channel of mergers. Theoretically, a domestic merger raises the profitability of tariffs when offshoring is unavailable; once offshoring is possible, the effect becomes ambiguous. I apply this framework to a merger between domestic producers in the U.S. appliance industry. Empirically, I find that when import competition is weak, the merging parties prefer to lower their own costs through offshoring; when import competition is strong, the merger makes it more profitable for them to raise their foreign rivals' costs through tariffs. The resulting consumer harm is comparable in magnitude to the direct market-power effect. A hypothetical cross-border merger reduces the profitability of tariffs in this market. |
| Keywords: | competition, lobbying, tariffs, protectionism, mergers |
| JEL: | F13 L13 L41 D72 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12880 |
| By: | Martin Obradovits; Markus Walzl |
| Abstract: | Consumers increasingly care about the environmental and social responsibility of the production processes used by firms, yet these processes often remain unobservable, even after consumption. We develop a simple model in which firms select either a green or a brown production technology before competing and signaling through prices. Firms observe each other's production choices, while consumers observe only prices. We show that, in the payoff-dominant equilibrium, prices signal when at least one firm produces green, avoiding Bertrand competition. Counterintuitively, raising consumers' environmental concerns or eliminating the information asymmetry may discourage green production and reduce welfare. |
| Keywords: | sustainable production, endogenous technology choice, price signaling, asymmetric information, price competition, label credence goods |
| JEL: | D82 D83 L13 L15 Q58 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:jku:econwp:2026-05 |
| By: | Delina E. Agnosteva (Pennsylvania State University); Constantinos Syropoulos (School of Economics, Drexel University and Center for Global Policy Analysis (CGPA)); Yoto V. Yotov (School of Economics, Drexel University and Center for Global Policy Analysis (CGPA)) |
| Abstract: | We characterize collusive pricing in an international cartel spanning two host countries and pooling incentive constraints across markets, under general demand restricted only by a mild curvature condition that admits constant elasticity. Under domestic monopoly, fragmentation can weaken collusion and raise host welfare, whereas richer profit opportunities abroad strengthen collusion and may lower it; hosts prefer moderate barriers to either free trade or complete separation. Under domestic competition both results reverse. Whether fragmentation disciplines cartels thus depends on market structure in their home countries. Since collusion requires no trade between members, prices rather than trade flows carry the identifying information. |
| Keywords: | Fragmentation; Oligopoly; Multimarket interactions; Cartel discipline; Collusive pricing; Trade costs; Domestic market structure |
| JEL: | D43 F10 F12 F13 F15 L12 L13 L41 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:drx:wpaper:202617 |
| By: | Grega Smrkolj (Newcastle University); Florian Wagener (University of Amsterdam) |
| Abstract: | We study a continuous-time duopoly model of process innovation with R&D spillovers, comparing noncooperative R&D with cooperative research regimes. We extend the standard constant-spillover framework by allowing knowledge transmission to decay with technological distance and to favor followers over leaders in asymmetric specifications. In a global Markov-perfect model, firms may invest before production is viable, enter or exit production as costs evolve, and converge to no-market, monopoly, or duopoly outcomes. State-dependent spillovers change R&D incentives, catch-up dynamics, long-run market structure, and the welfare effects of research cooperation. In the computed equilibria, more follower-favoring spillovers weaken the leader's private incentive to invest but accelerate catch-up, shorten monopoly phases, and make eventual duopoly more likely. When spillovers are weak, cooperation mainly softens dynamic rivalry; when information sharing is substantial, cooperation expands market formation, lowers long-run costs, and can raise both consumer and total surplus, especially under the research-joint-venture regime. The value of R&D cooperation depends on the direction and persistence of knowledge flows, not only on their average intensity. |
| JEL: | C73 D43 O31 |
| Date: | 2026–06–29 |
| URL: | https://d.repec.org/n?u=RePEc:tin:wpaper:20260041 |