Identify how companies cooperate tacitly and its consequent effects on prices for customers, exploring levers such as price observability and "match the lowest price" options. In groups of 2, students repeatedly set prices either on observable or non-observable contexts. Pairs well with case: GE vs Westinghouse (1960s)
Every "month", two contracts/sales are awarded and two students are competing to get them (who submit their proposal out of 5 price options). Both contracts go to the student who has the lowest price; in case of a draw, with probability defined by you (standard = 50%) they split the sales; otherwise both sales go to the same student. When prices are non-observable this creates a lack of trust among students ("Did she price below my offer? Or did we tie?") who then triggers a price war.
