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Collusive Networks in Market‐Sharing Agreements in the Presence of an Antitrust Authority

Flavia Roldán

Journal of Economics & Management Strategy, 2012, vol. 21, issue 4, 965-987

Abstract: This paper examines how the presence of an antitrust authority (AA) affects market‐sharing agreements made by firms. These agreements prevent firms from entering each other’s markets. The set of agreements defines a collusive network, which is pursued by antitrust authorities. This paper shows that in the absence of an AA, a network is stable if its alliances are large enough, and in the presence of an AA, more competitive structures can be sustained through bilateral agreements. Antitrust laws may have a procompetitive effect, as they give firms in large alliances more incentives to cut their agreements at once.

Date: 2012
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Working Paper: Collusive networks in market sharing agreements in the presence of an antitrust authority (2008) Downloads
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Handle: RePEc:bla:jemstr:v:21:y:2012:i:4:p:965-987