Does Price Fixing Benefit Corporate Managers?

Tanja Artiga Gonzalez, Markus Schmid and David Yermack ()
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David Yermack: Stern School of Business, New York University, New York, New York 10003; European Corporate Governance Institute, 1000 Brussels, Belgium; National Bureau of Economic Research, Cambridge, Massachusetts 02138

Management Science, 2019, vol. 65, issue 10, 4813-4840

Abstract: We study the effects of cartel participation on top corporate managers. Although a strong public interest exists in regulating price fixing, we find little evidence that either corporate governance or the legal system holds managers of cartel firms accountable. Instead, managers of cartel firms enjoy greater job security, receive higher cash bonuses, and more aggressively take profits from appreciated stock option awards. Legal sanctions against individual managers are infrequent, with enforcement actions focused on corporations rather than their officers. Managers seem to use concealment strategies actively to limit detection of cartel membership by their boards and auditors.

Keywords: price fixing; cartels corporate governance; executive compensation (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (12)

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https://doi.org/10.1287/mnsc.2018.3130 (application/pdf)

Related works:
Working Paper: Does Price Fixing Benefit Corporate Managers? (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:65:y:2019:i:10:p:4813-4840

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