This presentation by J. Haucap, C. Heldman and H. A. Rau summarises the key findings of their research paper on Gender and collusion submitted to the OECD project on Gender inclusive competition policy. It was delivered during a workshop held virtually on 7 October 2021. More materials on the topic can be found at http://oe.cd/gicp. This presentation was uploaded with the authors’ consent.

1. Gender inclusive
competition policy
oe.cd/gicp
Project #5:
Gender and Collusion
By Justus Haucap, Christina Heldman
and Holger Rau

2. Motivation
• Industrial economics and competition policy usually treat firms as collective entities
• Formation and breakdown of cartels typically explained by firms’ incentives and market conditions
• In reality, cartels are formed by individuals, who need to trust and cooperate
• Cartels are embedded in wider context as they cause harm for outsiders
• Little is known about characteristics of individuals involved in cartels
• Personality traits and preferences are highly relevant for cooperation and trust
• Gender has been identified as one central determinant for (economic) preferences and behaviour
Research Questions:
• Is there a difference between men and women in their willingness to collude?
• How is it affected if it imposes a negative externality on outsiders?
• What drives these potential differences?

3. • Laboratory cartel experiment with damage for passive outsider (such as consumers)
Method
Stage 1 Stage 2
Part 1: Cooperation problem
Part 2: Elicitation of preferences
Risk, patience, social value orientation, betrayal-, guilt-, shame aversion
Questionnaire: gender, age, duration of study
Matching in groups of 3 Random allocation of roles A, B or C
• Players A, B: Decision to set high
or low price
• Player C: Guess outcome
Re-matching of groups
Information about
interaction partner
• Players A, B: Decision to set high or
low price
• Player C: Guess outcome
2 Treatments:
Baseline: no harm for
outsider
Negative: outsider’s
payoff is reduced by
half if subjects collude

4. • Women collude less when outsider is harmed: effect driven by women who are guilt- and shame averse
• Men collude less when interacting with other men: effect driven by men who are betrayal averse
Results
0,38
0,52
0
0,1
0,2
0,3
0,4
0,5
0,6
Neg. externality Baseline
n = 149
n = 110
(0.49)
(0.50) (0.4
0,46 0,51
0,32
0,52
0
0,1
0,2
0,3
0,4
0,5
0,6
Neg. externality Baseline
Men Women
(0.51)
n = 47
n = 69
(0.50)
(0.47)
(0.50)
n = 63
n = 79
0,46
0,32
0,25
0,34
0
0,1
0,2
0,3
0,4
0,5
0,6
Men Women
Anonymous (Stage 1) Info (Stage 2)
(0.43)
(0.48)
n = 69
n = 79
(0.50)
(0.47)

5. Increased female representation in management positions can make collusion less likely:
• Promote diversity as part of competition advocacy work and the evaluation of firms’ compliance
programs
• Develop gender-sensitive forensic cartel analysis
• Enforcement priorities may be given to industries characterized by lower degrees of management
diversity
• Collect and report data on the sociodemographic characteristics of cartel participants to facilitate
future research
Recommendations to competition agencies

6. • Repeated interaction: How do men and women stabilize trust over time?
• Communication: How does communication facilitate creation of trust?
• Introduction of antitrust policies, such as leniency programs: How do men and women respond to
different policies?
• Analysis of further individual characteristics, such as cultural or educational differences
Plans for future work

7. About the authors
Justus Haucap
Director, Professor
Düsseldorf Institute for Competition Economics
(DICE)
@haucap & @DICEHHU
Podcast (with R. Podszun):
https://www.dice.hhu.de/beianrufwettbewerb
Holger Rau
Assistant Professor
University of Göttingen
@Holger1380
Christina Heldman
PhD Student
Düsseldorf Institute for Competition Economics
(DICE)
@ChHeldman & @DICEHHU

8. Gender inclusive
competition policy
Read Paper #5 at bit.ly/2Y5AMYK
oe.cd/gicp