Imperfect tacit collusion and asymmetric price transmission

We investigate asymmetric price transmission (APT) in laboratory experiments and find that imperfect tacit collusion is likely the cause our otherwise frictionless markets. vary number of sellers across markets to evaluate role competition plays APT. report similar magnitudes asymmetry with 3, 4, 6, 10 sellers, but not duopolies. Furthermore, consistently set their prices above best-response levels implied by forecasts, particularly periods following negative shocks. interpret these pricing deviations as sellers’ intentions collude, note they mechanically drive asymmetries we observe.