[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/jhu/papers/532.html
   My bibliography  Save this paper

Modelling the Birth and Death of Cartels with an Application to Evaluating Antitrust Policy

Author

Listed:
  • Joseph E. Harrington, Jr
Abstract
One of the primary challenges to measuring the impact of antitrust 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. It is then shown how one can infer the impact of antitrust policy on the population of cartels by measuring its impact on the population of discovered cartels. In particular, the change in the distribution on the duration of discovered cartels could be informative in assessing whether a new antitrust policy is reducing the latent rate of cartels.

Suggested Citation

  • Joseph E. Harrington, Jr, 2006. "Modelling the Birth and Death of Cartels with an Application to Evaluating Antitrust Policy," Economics Working Paper Archive 532, The Johns Hopkins University,Department of Economics.
    • Handle: RePEc:jhu:papers:532
    as

    Download full text from publisher

    File URL: http://www.econ2.jhu.edu/REPEC/papers/wp532harrington.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Joseph E. Harrington, 2005. "Optimal Cartel Pricing In The Presence Of An Antitrust Authority," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 46(1), pages 145-169, February.
    2. Spagnolo, Giancarlo, 2006. "Leniency and Whistleblowers in Antitrust," CEPR Discussion Papers 5794, C.E.P.R. Discussion Papers.
    3. Joseph E. Harrington, Jr., 2004. "Cartel Pricing Dynamics in the Presence of an Antitrust Authority," RAND Journal of Economics, The RAND Corporation, vol. 35(4), pages 651-673, Winter.
    4. Harrington, Joseph Jr. & Chen, Joe, 2006. "Cartel pricing dynamics with cost variability and endogenous buyer detection," International Journal of Industrial Organization, Elsevier, vol. 24(6), pages 1185-1212, November.
    5. Rotemberg, Julio J & Saloner, Garth, 1986. "A Supergame-Theoretic Model of Price Wars during Booms," American Economic Review, American Economic Association, vol. 76(3), pages 390-407, June.
    6. Philippe Cyrenne, 1999. "On Antitrust Enforcement and the Deterrence of Collusive Behaviour," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 14(3), pages 257-272, May.
    7. Joseph E. Harrington, Jr & Joe Chen, 2005. "he Impact of the Corporate Leniency Program on Cartel Formation and the Cartel Price Path," Economics Working Paper Archive 528, The Johns Hopkins University,Department of Economics.
    8. Reinhard Selten, 1973. "A Simple Model of Imperfect Competition, where 4 are Few and 6 are Many," Center for Mathematical Economics Working Papers 008, Center for Mathematical Economics, Bielefeld University.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Joseph E. Harrington, Jr., 2011. "Corporate Leniency with Private Information: The Push of Prosecution and the Pull of Pre-emption," Economics Working Paper Archive 573, The Johns Hopkins University,Department of Economics.
    2. Roberta Dessì & Salvatore Piccolo, 2008. "Two is Company, N is a Crowd? Merchant Guilds and Social Capital," CSEF Working Papers 202, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy, revised 12 Jul 2009.
    3. Joseph E. Harrington, Jr., 2009. "When Does a Self-Serving Antitrust Authority Act in Society's Best Interests?," Economics Working Paper Archive 549, The Johns Hopkins University,Department of Economics.
    4. Bigoni, Maria & Fridolfsson, Sven-Olof & Le Coq, Chloé & Spagnolo, Giancarlo, 2008. "Fines, Leniency and Rewards in Antitrust: An Experiment," Working Paper Series 738, Research Institute of Industrial Economics, revised 06 Aug 2009.
    5. Ari Hyytinen & Frode Steen & Otto Toivanen, 2018. "Cartels Uncovered," American Economic Journal: Microeconomics, American Economic Association, vol. 10(4), pages 190-222, November.
    6. Myong-Hun Chang & Joseph E. Harrington, Jr., 2008. "The Impact of a Corporate Leniency Program on Antitrust Enforcement and Cartelization," Economics Working Paper Archive 548, The Johns Hopkins University,Department of Economics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zhou, Jun, 2011. "Evaluating Leniency with Missing Information on Undetected Cartels: Exploring Time-Varying Policy Impacts on Cartel Duration," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 353, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    2. Panayiotis Agisilaou, 2013. "Collusion in Industrial Economics and Optimally Designed Leniency Programmes - A Survey," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2013-03, Centre for Competition Policy, University of East Anglia, Norwich, UK..
    3. Joseph E. Harrington, Jr, 2005. "Detecting Cartels," Economics Working Paper Archive 526, The Johns Hopkins University,Department of Economics.
    4. Joseph E. Harrington, Jr & Joe Chen, 2005. "he Impact of the Corporate Leniency Program on Cartel Formation and the Cartel Price Path," Economics Working Paper Archive 528, The Johns Hopkins University,Department of Economics.
    5. Houba Harold & Motchenkova Evgenia & Wen Quan, 2015. "The Effects of Leniency on Cartel Pricing," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 15(2), pages 351-389, July.
    6. Joseph E. Harrington, Jr, 2005. "Optimal Corporate Leniency Programs," Economics Working Paper Archive 527, The Johns Hopkins University,Department of Economics.
    7. Bolotova, Yuliya & Connor, John M. & Miller, Douglas J., 2008. "The impact of collusion on price behavior: Empirical results from two recent cases," International Journal of Industrial Organization, Elsevier, vol. 26(6), pages 1290-1307, November.
    8. Switgard Feuerstein, 2005. "Collusion in Industrial Economics—A Survey," Journal of Industry, Competition and Trade, Springer, vol. 5(3), pages 163-198, December.
    9. Sylvain Chassang & Kei Kawai & Jun Nakabayashi & Juan Ortner, 2019. "Data Driven Regulation: Theory and Application to Missing Bids," Boston University - Department of Economics - Working Papers Series WP2019-04, Boston University - Department of Economics.
    10. Joseph E. Harrington Jr. & Andrzej Skrzypacz, 2007. "Collusion under monitoring of sales," RAND Journal of Economics, RAND Corporation, vol. 38(2), pages 314-331, June.
    11. Motchenkova, Evgenia, 2008. "Determination of optimal penalties for antitrust violations in a dynamic setting," European Journal of Operational Research, Elsevier, vol. 189(1), pages 269-291, August.
    12. Gerlach, Heiko, 2009. "Stochastic market sharing, partial communication and collusion," International Journal of Industrial Organization, Elsevier, vol. 27(6), pages 655-666, November.
    13. Joseph E. Harrington, Jr, 2006. "How Do Cartels Operate?," Economics Working Paper Archive 531, The Johns Hopkins University,Department of Economics.
    14. Bartolini David & Zazzaro Alberto, 2011. "The Impact of Antitrust Fines on the Formation of Collusive Cartels," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-30, September.
    15. Katsoulacos, Yannis & Motchenkova, Evgenia & Ulph, David, 2015. "Penalizing cartels: The case for basing penalties on price overcharge," International Journal of Industrial Organization, Elsevier, vol. 42(C), pages 70-80.
    16. Harold Houba & Evgenia Motchenkova & Quan Wen, 2008. "Maximal Cartel Pricing and Leniency Programs," Tinbergen Institute Discussion Papers 08-120/1, Tinbergen Institute.
    17. Harrington, Joseph Jr. & Chen, Joe, 2006. "Cartel pricing dynamics with cost variability and endogenous buyer detection," International Journal of Industrial Organization, Elsevier, vol. 24(6), pages 1185-1212, November.
    18. Bochet, Olivier, 2007. "Switching from complete to incomplete information," Journal of Mathematical Economics, Elsevier, vol. 43(6), pages 735-748, August.
    19. Sylvain Chassang & Kei Kawai & Jun Nakabayashi & Juan Ortner, 2022. "Robust Screens for Noncompetitive Bidding in Procurement Auctions," Econometrica, Econometric Society, vol. 90(1), pages 315-346, January.
    20. Emilie Dargaud & Andrea Mantovani & Carlo Reggiani, 2013. "The fight against cartels: a transatlantic perspective," Post-Print halshs-00944334, HAL.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jhu:papers:532. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Humphrey Muturi (email available below). General contact details of provider: https://edirc.repec.org/data/dejhuus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.