Pricing Under Explicit and Tacit Collusion

This paper systematizes the theoretically developed models of cartel behavior in the literature to simplify the further creation of tools for identifying collusion. The paper considers theoretical models from early and simple to more advanced multi-period game-theoretic models of firms' interaction with the ability to switch between different equilibria in subgames. For each of the models, the main prerequisites are identified and analyzed for plausibility, as well as a comparative analysis of the prerequisites of various models to derive the conditions necessary for the switching from one model to another. In addition, the paper analyzes the predictions of the models for the dynamics of equilibrium prices and outputs volumes. For each of the models, conclusions are drawn about the expected change (in comparison with the period of competition) in the level, volatility and pro or countercyclicality of prices and volumes of output. This work can be used as a starting point in the development of empirical analysis tools to identify suspicious (in terms of the collusion of producers) markets. Such tools will be very useful to society, since their using by antimonopoly authorities will allow them either to better identify the collusion, or will make violators of the antimonopoly legislation to change their behavior to minimize the likelihood of detecting a violation. Note that in most of the considered models, such a change in behavior is possible only in the direction of decreasing (at least in some of the periods) prices since the opposite leads to incentives to deviate from the collusion.