Modeling the Birth and Death of Cartels with an Application to Evaluating Competition Policy

2009-10-28articleJournal of the European Economic Association120 citationsclosed

No readable copy stored yet — this record is metadata only.

Merger and Competition Analysis Consumer Market Behavior and Pricing Business Strategy and Innovation

Abstract

One of the primary challenges to measuring the impact of antitrust or competition policy on collusion is that the cartel population is unobservable; we observe only the population of discovered cartels. To address this challenge, a model of cartel creation and dissolution is developed to endogenously derive the populations of cartels and discovered cartels. With this theory, one can infer the impact of competition policy on the population of cartels by measuring its impact on the population of discovered cartels. In particular, changes in the duration of discovered cartels can be informative in assessing whether a new policy is reducing the latent rate of cartels.

Citations in this library

Stored only when both papers are in the corpus — 120 citations exist upstream.

References

1986A Supergame-Theoretic Model of Price Wars during Booms

2009Strategic Leniency and Cartel Enforcement

1988A Simple Model of Imperfect Competition, where 4 Are Few and 6 Are Many

2009An empirical study of the European corporate leniency program

2008OPTIMAL CORPORATE LENIENCY PROGRAMS*

2004Cartel Pricing Dynamics in the Presence of an Antitrust Authority

2005OPTIMAL CARTEL PRICING IN THE PRESENCE OF AN ANTITRUST AUTHORITY*

Cited by

2013Corporate Leniency Programs when Firms have Private Information: The Push of Prosecution and the Pull of Pre‐emption

2007Cartels: The Probability of Getting Caught in the European Union