> the collusion detection problem is computationally infeasible for markets satisfying a natural instance-hardness condition on their demand structure, rendering punishment threats non-credible and collusion unstable.
And yet we’ve clearly observed stable price fixing cartels. Maybe the word “unstable” means too much or the game theory model used doesn’t describe the real world accurately. When theory is contradicted by the evidence, it would be wise to consider the theory is flawed.
And yet we’ve clearly observed stable price fixing cartels. Maybe the word “unstable” means too much or the game theory model used doesn’t describe the real world accurately. When theory is contradicted by the evidence, it would be wise to consider the theory is flawed.