“Pricing game” for tacit collusion and passive investment

Research output: Contribution to journalConference article


This paper aimed to figure out the structural factors of tacit collusion from the perspective of the oligopolistic market. A two-step approach is adopted to analyse this phenomenon. As pricing mechanisms shift from traditional method to computational algorithm, herein termed the “pricing game”, new forms of collusion are expected to emerge. First, game theory is applied toward an understanding of this unspoken collusion, which involves interaction between different parties. A potential new form of collusion is identified as having been created by information signals in the price networks. Second, firms are owned by overlapping sets of investors (passive investors), and their incentives to compete are thereby reduced. Investors are rapidly shifting their investment allocations from active to passive management (ETF; Exchange Traded Funds), in response to the complexity of asset management and the excess liquidity from central banks around the industrial world. This trend has accelerated during the last decade. A potential solution for this situation may be found in family ownership, as a countervailing power for healthy competition.

Original languageEnglish
Pages (from-to)323-334
Number of pages12
JournalCEUR Workshop Proceedings
Publication statusPublished - 1 Jan 2019
Event5th Collaborative European Research Conference, CERC 2019 - Darmstadt, Germany
Duration: 29 Mar 201930 Mar 2019



  • Game theory
  • Oligopoly
  • Passive and active investor
  • Pricing algorithm
  • Tacit collusion

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