Supply‐ vs. Demand‐Side Transparency: The Collusive Effects Under Imperfect Public Monitoring


We analyse how market transparency affects collusion under imperfect monitoring where punishment phases occur on the equilibrium path. We show that increased transparency causes a ‘pro‐competitive’ demand‐side effect and an ‘anti‐competitive’ supply‐side effect on the optimal symmetric perfect public equilibrium (SPPE) profits. When transparency increases on both sides of the market, the optimal SPPE profits unambiguously increase at the perfect monitoring limit, because the pro‐competitive demand‐side effect vanishes. This result holds even when there is minimal structure on the competition game. The supply‐side effect also dominates away from the limit under reasonable conditions. We draw conclusions for policy.

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Divisions: College of Business and Social Sciences > Aston Business School > Economics, Finance & Entrepreneurship
College of Business and Social Sciences > Aston Business School > Centre for Personal Financial Wellbeing
College of Business and Social Sciences > Aston Business School
Additional Information: © 2021 The Authors. The Journal of Industrial Economics published by Editorial Board and John Wiley & Sons Ltd. This is an open access article under the terms of the Creative Commons Attribution-NonCommercial-NoDerivs License, which permits use and distribution in any medium, provided the original work is properly cited, the use is non-commercial and no modifications or adaptations are made.
Uncontrolled Keywords: Accounting,Business, Management and Accounting(all),Economics and Econometrics
Publication ISSN: 1467-6451
Last Modified: 08 Apr 2024 07:30
Date Deposited: 13 Dec 2021 09:59
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Related URLs: https://onlinel ... 1111/joie.12260 (Publisher URL)
http://www.scop ... tnerID=8YFLogxK (Scopus URL)
PURE Output Type: Article
Published Date: 2021-12-10
Accepted Date: 2021-09-01
Authors: Garrod, Luke
Olczak, Matthew (ORCID Profile 0000-0001-6808-3832)

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