Date of Graduation
5-2026
Document Type
Dissertation
Degree Name
Doctor of Philosophy in Economics (PhD)
Degree Level
Graduate
Department
Economics
Advisor/Mentor
McGee, Peter
Committee Member
Bhattacharya, Puja
Second Committee Member
Li, Sherry
Keywords
Collusion; Coordination; Focal Point; Worker Movement
Abstract
Worker mobility is widely viewed as welfare enhancing: it spreads technology, accelerates innovation, and improves labor market outcomes. But when workers move between product-market competitors, the information they carry may include more than technical knowledge. This dissertation presents three experimental studies on collusion and coordination in strategic environments. The first chapter, coauthored with Peter McGee, implements Bertrand price competition in experimental markets with either two or four firms in which firms are two-subject teams who can discuss pricing decisions. We introduce a coarse channel for inter-firm communication: one subject on each team moves to a rival firm in the same market. Prices increase significantly after the movement, 27.5 percent in two-firm markets and 115 percent in four-firm markets. The frequency of markets pricing above the Nash equilibrium also increases significantly, but price coordination remains difficult to achieve and sustain. Team chats indicate that collusion is a frequent topic of discussion before the switch, and more frequent discussion of collusion before subjects change firms is associated with significantly higher prices afterward. The second chapter, also coauthored with Peter McGee, addresses a coordination failure the first chapter leaves unresolved: firms that want to collude cannot agree on which price. We test whether a regulatory price ceiling provides the necessary focal point. Field evidence has long suggested that ceilings facilitate collusion, yet every prior laboratory experiment has failed to replicate this finding. Introducing a ceiling after worker movement nearly triples the rate of sustained maximum-price coordination. The ceiling and the motivation to collude are complements: the former spreads the intent to coordinate and the latter provides a salient price on which to do so. Shifting from firm-level collusion to individual coordination, the third chapter, coauthored with J. Braxton Gately and Ashley McCrea, examines whether group affiliation serves as a noisy signal of agents' types that aids coordination. In a laboratory coordination game where payoffs depend on the distance between a player's action and their privately known type, we find that group membership does not improve coordination rates. Yet participants systematically join groups whose average action is closest to their own type, and a companion beliefs study shows that they overweight the likelihood of successful coordination when group information is present. Beliefs about coordination without groups are relatively accurate; it is the addition of group information that distorts judgment. These findings suggest that concerns about cultural differences as barriers to coordination may rest on overweighted beliefs about the importance of group affiliation rather than on its actual effect.
Citation
Lamichhane, K. (2026). Three Essays on Collusion and Coordination in Strategic Environments. Graduate Theses and Dissertations Retrieved from https://scholarworks.uark.edu/etd/6195
