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Endogenous Cartel Organization and Antitrust Fine Discrimination

Tim Reuter ()

Review of Industrial Organization, 2017, vol. 51, issue 3, 291-313

Abstract: Abstract Third parties such as trade associations often assist cartels to distinguish defecting from complying behaviour, whereby cartel persistence can increase. We investigate how cartels sort themselves into different forms of cartel organization and whether enforcement can be improved by setting fines contingent on the organizational form. A fine reduction for firms that operate without third party assistance causes some cartels to switch to a less persistent organizational form. Two drawbacks of this fine differentiation are that new cartels will arise and that the existing cartels will become more persistent as the need to punish defectors decreases.

Keywords: Antitrust enforcement; Cartel organization; Marginal deterrence; Trade associations (search for similar items in EconPapers)
Date: 2017
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Working Paper: Endogenous Cartel Organization and Antitrust Fine Discrimination (2013) Downloads
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Handle: RePEc:kap:revind:v:51:y:2017:i:3:d:10.1007_s11151-017-9574-z