I tried to present a new method to prevent collusion through employing two auditors at the same time and inspiring them provide true report by exploiting their prisoner’s dilemma. But I found this method cannot be put into practice because of the high cost. So I analyzed whether sending the second auditor in a probability, a low cost method, can deter the audit collusion. I find sending the sec...

We study collusion within groups in noncooperative games. The primitives are the preferences of the players, their assignment to nonoverlapping groups, and the goals of the groups. Our notion of collusion is that a group coordinates the play of its members among different incentive compatible plans to best achieve its goals. Unfortunately, equilibria that meet this requirement need not exist. W...

The existing literaturewhich analyses the relationship between the product differentiation degree and the sustainability of a collusive agreement on price assumes that firms cannot price discriminate, and concludes that there is a negative relationship between the product differentiation degree and the critical discount factor. This paper, in contrast, assumes that firms are able to price discr...

This chapter is to explain the China Model characterized with “high economic growth rate concomitant with high frequency of vicious accidents” by constructing a formal model of the local government–firm collusion. Section 2.1 introduces three famous or infamous events about PX (p-Xylene) projects in China and raises two questions relevant to these events. Section 2.2 makes a literature review o...

Tacit Collusion in Auctions and Conditions for Its Facilitation and Prevention: Equilibrium Selection in Laboratory Experimental Markets Jin Li Massachusetts Institute of Technology Charles R. Plott California Institute of Technology The paper studies bidder behavior in simultaneous, continuous, ascending price auctions. The purpose is to create (possibly extreme) conditions under which tacit c...

We consider collusion in multi-unit auctions where the allocation and payments are determined using the VCG mechanism. We show how collusion can increase the utility of the colluders, characterize the optimal collusion and show it can easily be computed in polynomial time. We then analyze the colluders’ coalition from a cooperative game theoretic perspective. We show that the collusion game is ...

This article tests experimentally whether a high degree of collusion on advertisement expenditures facilitate tacit price collusion in duopoly markets. Two environments are tested, in which the size of the spillover between advertising expenditures is varied. The results show that the competitiveness of advertising and prices are significantly higher when the advertising spillover is higher tha...

Recent efforts for watermarking digital video extend the results obtained for still image watermarking. As a result, most of the proposed algorithms rely on a frame-by-frame approach. Such an adaptation leads to unreliable algorithms in terms of security. The goal of this article is to stress the problem of collusion when digital watermarked data is distributed at large scale and especially int...

The present paper studies repeated oligopoly where the firms compete with price in multiple markets. The markets are subject to independent, stochastic fluctuations in demands. The literature points out that while the demand fluctuations generally hinder collusion, the multimarket contact sometimes facilitates it. We show that on an intermediate range of discount factors where only partial coll...

This note comments on Feuerstein’s (Feuerstein, Switgard, BCollusion in industrial economics: A survey,^ forthcoming in Journal of Industry, Competition and Trade, 2005) survey of collusion theory. I start by presenting evidence from a recent real-world collusion case: the lysine industry. Based on this, I point out a few areas where collusion theory can improve: (a) the problem of equilibrium ...