Maverick – Making Sense of a Conjecture of Antitrust Policy in the Lab

Engel, Christoph; Ockenfels, Axel

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Maverick – Making Sense of a Conjecture of Antitrust Policy in the Lab

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Engel, Christoph
Max Planck Institute for Research on Collective Goods, Max Planck Society;

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Ockenfels, Axel
Max Planck Institute for Research on Collective Goods, Max Planck Society;

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http://www.coll.mpg.de/pdf_dat/2013_14online.pdf
(Preprint)

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Citation

Engel, C., & Ockenfels, A. (2013). Maverick – Making Sense of a Conjecture of Antitrust Policy in the Lab.

Cite as: http://hdl.handle.net/11858/00-001M-0000-0028-6DD2-C

Abstract

Antitrust authorities all over the world are concerned if a particularly aggressive competitor, a "maverick", is bought out of the market. Yet there is a lack of theoretical justification. One plausible determinant of acting as a maverick is behavioral: the maverick derives utility from acting competitively. We test this conjecture in the lab. In a pretest, we classify participants by their social value orientation. Individuals who are rivalistic in an allocation task indeed bid more aggressively in a laboratory oligopoly market. This disciplines incumbents. In our setting, this does not create sufficient incentives for buying out mavericks, though.