arXiv:nlin/0411006nlin.AO
Emergent Effective Collusion in an Economy of Perfectly Rational Competitors
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Abstract
We consider a simple model of rational agents competing in a single product market described by simple linear demand curve. Contrary to accepted economic theory, the agents' production levels synchronise in the absence of conscious collusion, leading to a downward spiraling of market total production until the monopoly price level is realised. This is in stark contrast to the standard predictions of an ideal rational competitive market. Some form of randomness in the form of agent irrationality, or non-synchronous updates is needed to break this emergent "collusion"
No. There is an excellent work by Steve Keen that shows how simple it is for non-communicating bots under perfect competition to collude: http://arxiv.org/pdf/nlin/0411006.pdf I wish that mainstream economists would accept that the collusion and not competition (aka price war)…
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