Tacit collusion, firm asymmetries and numbers: evidence from EC merger cases

Stephen Davies, Matthew Olczak and Heather Coles
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Stephen Davies: Centre for Competition Policy and School of Economics, University of East Anglia
Matthew Olczak: Aston Business School, Aston University

No 2007-07, Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) from Centre for Competition Policy, University of East Anglia, Norwich, UK.

Abstract: This paper estimates the implicit model, especially the roles of size asymmetries and ï¬ rm numbers, used by the European Commission to identify mergers with coordinated effects. This subset of cases offers an opportunity to shed empirical light on the conditions where a Com-petition Authority believes tacit collusion is most likely to arise. We ï¬ nd that, for the Commission, tacit collusion is a rare phenomenon, largely conï¬ ned to markets of two, more or less symmetric, players. This is consistent with recent experimental literature, but contrasts with the facts on 'hard-core' collusion in which ï¬ rm numbers and asymmetries are often much larger.

Keywords: Tacit collusion; collective dominance; coordinated effects; European mergers; asymmetries (search for similar items in EconPapers)
JEL-codes: L13 L41 (search for similar items in EconPapers)
Date: 2007-02-01
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Persistent link: https://EconPapers.repec.org/RePEc:uea:ueaccp:2007_07

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