Experiments and Competition Policy

Economists have begun to make much greater use of experimental methods in their research. The award of the Nobel Prize in 2002 to Vernon Smith confirmed that the use of such methods is now seen as an important and credible part of the economist's toolkit. In Experiments and Competition Policy, leading scholars in the field of experimental economics survey the use of experimental methods and show how they can help us to understand firm behaviour in relation to various forms of competition policy. Chapters are organized in terms of the main fields of competition policy - collusion, abusive practices and mergers - and there is also a separate section dealing with auctions and procurement. Written in a clear and non-technical style, this volume is an excellent introduction to what the increasingly important field of experimental economics can bring to the theory and practice of competition policy.

Table of Contents:
1. Introduction Jeroen Hinloopen and Hans-Theo Normann; Part I: 2. Experimental results on collusion: the role of information and communication Marco A. Haan, Lambert Schoonbeek and Barbara M. Winkel; 3. Transparency about past, present and future conduct: experimental evidence on the impact on competitiveness J. Potters; 4. Collusion in growing and shrinking markets: experimental evidence from experimental duopolies Klaus Abbink and Jordi Brandts; 5. The effect of price ceilings in experimental posted-offer markets Hans-Theo Normann and Dirk Engelmann; Part II: 6. Experiments on abuse of a dominant position Eric van Damme, L. Hancher, Pierre Larouche and Wieland Müller; 7. Buyer power Bradley Ruffle; Part III: 8. Experiments on changes in market structure and their effect on performance Lorenz Götte and Armin Schmutzler; 9. Mergers in Stackelberg markets: an experimental study Steffen Huck; Part IV: 10. Making uncompetitive auctions competitive: a survey of experiments Theo Offerman and Sandler Onderstal; 11. Investment incentives in auctions: an experiment Veronika Grimm, Friederike Mengel, Giovanna Ponti and Lari Arthur Viianto; 12. Experiments and the practice of competition policy Jeroen Hinloopen and Hans-Theo Normann; Index.

Review :
Review of the hardback: 'This is a most timely book. The European Commission has heralded in the more economic approach to competition policy. While both (game) theory and econometrics have made headway in anti-trust territory, anti-trust practice has almost totally neglected the experimental evidence. This volume aptly combines survey articles with fresh evidence directly targeting standard topics in competition policy. It is highly recommended for experimental economists, industrial organization specialists, and anti-trust lawyers.' Christoph Engel, Max-Planck-Institute for Research on Collective Goods, Bonn, and University of Bonn Review of the hardback: 'The coming of age of experimental economics is signified by the increased role it plays for policy making. Experiments and Competition Policy provides an in-depth overview of the diverse policy applications that can be studied in the laboratory, including collusion, mergers, price competition, and auction design. Hinloopen and Normann have done a superb job of collecting a broad array of frontier research. This work should prove a useful reference for academicians and practitioners for years to come.' Jacob K. Goeree, Caltech Social Science Experimental Laboratory (SSEL), Caltech '… the volume at hand is best suited for the use as a reference work for scientific study. Not only the available experimental evidence, but also the related theoretical work is covered in a fairly comprehensive and easily accessible manner. … an excellent starting point.' European Competition Law Review