Gender Effects in Oligopolistic Markets: Leadership and Collusion

• Applicants: Professor Dr. Holger Rau; Professorin Dr. Anne Schacht
• Subject Area: Economic Policy, Applied Economics
• Term: since 2023
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 520326093

The determinants of cartel formation and the conditions to guarantee the stability of collusive agreements are important questions in industrial organization and competition policy. So far, most of the literature focuses on firms and their incentives as the unit of analysis. Importantly, cartels are usually formed by individuals, such as product managers and their motives to participate in cartels. Less is known on the effects of female managers in oligopolistic markets, as they still are under-represented in these positions. This lack of evidence causes competition policy to be largely gender blind. Motivated by the aforementioned ignorance of competition policy of individual behavior, we propose an experimental agenda with three work packages to fill these research gaps. We systematically analyze the consequences of gender differences in economic preferences, personality traits, and communication styles for the establishment of cartels. To study gender differences in conversations we apply an innovative interdisciplinary approach of face recognition and vocal analyses to interpret communication styles and emotions of subjects discussing prices. Our agenda also focuses on the effectiveness of antitrust policies concerning different gender compositions. In this respect, we test women’s and men’s reactions to non-discriminatory and discriminatory leniency policies. Another innovation is that we will run online experiments with executive business practitioners to test for the external validity of the findings. Furthermore, we shed light on the role of gender differences in leadership and affirmative action policies. Thus, the results of this project will not only be relevant for researchers, but also for policymakers and the broader public. Overall, our research combines basic research in the domain of behavioral economics and neurocognitive psychology with applied research in industrial organization and competition policy.

• DFG Programme: Research Grants