Collusion with Asymmetric Retailers: Evidence from a Gasoline Price-Fixing Case

Robert Clark and Jean-Fran?ois Houde

American Economic Journal: Microeconomics, 2013, vol. 5, issue 3, 97-123

Abstract: We point out a fundamental difficulty of successfully colluding in retail markets with heterogeneous fi rms, and characterize the mechanism recent gasoline cartels in Canada used to sustain collusion. Heterogeneity in cost and network size necessitates arrangements whereby participants split the market unequally to favor stronger players. We characterize empirically the strategy and transfer mechanism using court documents containing summaries and extracts of conversations between participants. The mechanism implements transfers based on adjustment delays during price changes. We estimate that these delays can translate into substantial transfers and provide examples in which they can substantially reduce deviation frequency.

JEL-codes: K21 L12 L71 L81 (search for similar items in EconPapers)
Date: 2013
Note: DOI: 10.1257/mic.5.3.97
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Citations: View citations in EconPapers (71)

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