Cartel in the Indian cement industry: An attempt to identify it

Sylwester Bejger

No 2012-18, Economics Discussion Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: This article is devoted to the problem of the detection of overt or tacit collusion equilibrium in the context of the choice of the appropriate econometric method, a choice that is determined by the amount of information that the observer possesses. The author addresses this problem in two steps. First, to provide a theoretical background, he uses a collusion marker based on structural disturbances in a price process'; variance. Then, he applies a Markov switching model with switching in variance regimes. The author considers this method adequate and coherent with the problem structure and the research objective, and useful for assessing the functionality of the collusion marker he uses. He uses the model to examine the Indian cement industry in the period 1994-2009 and finds some objective indications of collusion and competition phases. These phases are confirmed by certain historical facts as well as by numerous research articles.

Keywords: Explicit and tacit collusion; collusive equilibrium; cartel detection; cement industry; price variance; Markov switching model (search for similar items in EconPapers)
JEL-codes: C22 L13 L61 (search for similar items in EconPapers)
Date: 2012
New Economics Papers: this item is included in nep-com, nep-cwa, nep-hme and nep-ind
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwedp:201218

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