Is the best case scenario (=easiest) for the exercise you want to do and will illustrate what is hard about the grocery case. In the paper there is:
- One product
- one clearly isolated market.
- four or five firms.
- A clear mechanism for collusion (a government price sharing website).
Even then there is no statistical or econometric test out of the box which “shows collusion”. It’s a great paper (both in my opinion and that’s why it got into AER) but there is nothing they do that says “hey here’s collusion based on this t-stat.”
The grocery case (overlapping markets, thousands of products, many firms) is vastly, vastly harder.
This paper:
https://www.aeaweb.org/articles?id=10.1257/aer.20170116
Is the best case scenario (=easiest) for the exercise you want to do and will illustrate what is hard about the grocery case. In the paper there is:
- One product
- one clearly isolated market.
- four or five firms.
- A clear mechanism for collusion (a government price sharing website).
Even then there is no statistical or econometric test out of the box which “shows collusion”. It’s a great paper (both in my opinion and that’s why it got into AER) but there is nothing they do that says “hey here’s collusion based on this t-stat.”
The grocery case (overlapping markets, thousands of products, many firms) is vastly, vastly harder.