Detection of Collusion Equilibrium in an Industry with Application of Wavelet Analysis

Sylwester Bejger and Joanna Bruzda
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Sylwester Bejger: Nicolaus Copernicus University in Toruñ

Dynamic Econometric Models, 2011, vol. 11, 155-170

Abstract: In the present paper an attempt was made to verify the possibilities of the use of a marker of structural changes of market price variance in the detection of trade collusion between business players. We used the theoretical model of strategic behaviour of trade players with the assumption of exogenous and time-constant cartel quota (market shares), which justifies the application of a marker for business with specific parameters. The paper contains empirical employment of a marker for a sequence of average Lysine price on the USA market in 1990–1996. Wavelet analysis was applied, for the first time in this context, as the econometric method for the detection of structural changes in the variance.

Keywords: Explicit and tacit collusion; supergame with a fixed structure of market shares; price variance; wavelet analysis (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:cpn:umkdem:v:11:y:2011:p:155-170

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