Narrow Results

In simultaneous ascending price auctions with heterogeneous goods Brusco and Lopomo [2002] derive collusive equilibria, where bidders divide objects among themselves, while keeping the prices low. Considering a simultaneous ascending price auction with a fixed deadline, i.e. the hard close auction format, a prisoner's dilemma situation results and collusive equilibria do not longer exist, even for only two bidders. Hence, we introduce a further reason for sniping behavior in Hard Close auctions, i.e. to appear to collude early in the auction and to defect at the very last moment.

We analyze the effect of customizing a product on the ability of firms to tacitly collude on prices. Following [Bar-Isaac et al. [2014] Targeted product design: Locating inside the Salop circle, Mimeo], we allow firms to be located inside the circle in the Salop model [Salop, S. [1979] Monopolistic competition with outside goods, Bell J. Econ., 10(1), 141–156]. Our analysis shows that the effect of product customization on the stability of collusion depends on the sensitivity of consumers’ utility to the degree of customization. In particular, if that sensitivity is low enough, then greater customization facilitates collusion. Otherwise, greater customization hinders collusion if consumers value the product little.

To achieve robustness and imperceptibility, an adaptive compressed domain blind video watermarking method based on Discrete Wavelet Transform (DWT) is proposed in this research. In this technique, multiple binary images derived from a single watermark image are first embedded in a video sequence. The spatial spread spectrum watermark is directly incorporated in the compressed bit streams by modifying the four sets of discrete wavelet coefficients. Comprehensive simulation experiments demonstrate that the developed approach is efficient and also robust against spatial attacks such as scaling and frame averaging, noise attacks such as Gaussian and salt pepper noise, and temporal attacks like frame dropping and shifting. Moreover, the proposed approach can also withstand against rotation attacks of arbitrary angle.

The so-called “Win-Continue, Lose-Reverse” (WCLR) rule is a simple iterative procedure that can be used to choose a value for any numeric variable (e.g., setting a price or a production level). The rule dictates that one should evaluate the effect on profits of the last adjustment made to the value (e.g., a price variation), and keep on changing the value in the same direction if the adjustment led to greater profits, or reverse the direction of change otherwise. Somewhat surprisingly, this simple rule has been shown to lead to collusive outcomes in Cournot oligopolies, even though its application requires no information about the other firms’ profits or choices. In this paper, we show that the convergence of the WCLR rule toward collusive outcomes can be very sensitive to small independent perturbations in the cost functions or in the income functions of the firms. These perturbations typically push the process toward the Nash equilibrium of the one-shot game. We also explore the behavior of WCLR against other strategies and demonstrate that WCLR is easily exploitable. We then conduct a similar analysis of the WCLR rule in a differentiated Bertrand model, where firms compete in prices.

Assume that there are players and an eavesdropper Eve of unlimited computational power and that several pairs of players have shared secret keys beforehand. In a key sharing graph, each vertex corresponds to a player, and each edge corresponds to a secret key shared by the two players corresponding to the ends of the edge. Given a key sharing graph, a player wishes to send a message to another player so that the eavesdropper Eve and any other player can get no information on the message. In this paper, we first give a necessary and sufficient condition on a key sharing graph for the existence of such a unicast protocol. We then extend the condition to the case where a multiple number of players other than the sender and receiver passively collude. We finally give a sufficient condition for the existence of a secure multicast protocol.

This study investigates when a cartel that uses a sales quota allocation scheme monitors more frequently than it enforces; for example, monitoring of sales is done on a weekly basis but firms are only required to comply with sales quotas on a quarterly basis. In a simple three-period quantity game with i.i.d cost and demand shocks, we show that the volatility of a cartel member's sales follows a U-shape within the compliance horizon. In comparison, sales volatility is constant over time under competition. This result offers a simple empirical test for distinguishing collusion from competition using sales data.

Recent laboratory experiments support the popular view that the introduction of corporate leniency programs has significantly decreased cartel activity. We develop a classroom experiment that captures key features of leniency programs. Our treatments include an exploitable and a non-exploitable leniency program to highlight possible adverse effects of leniency programs that are too generous. We also examine to what extent a non-exploitable leniency program triggers tacit collusion. The experimental results show that if the efforts of the antitrust authority and the leniency program are directed exclusively to the most straightforward collusive scheme, subjects manage to switch to a more intricate form of coordination. This shift from overt collusion to tacit collusion can serve as the basis for a classroom discussion about the effectiveness of actual leniency programs.