Cartel Member or Free Rider? Detecting Collusion at the Firm Level

Andreas Bovin ()
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Andreas Bovin: DG Competition, European Commission

Review of Industrial Organization, 2025, vol. 66, issue 3, No 2, 293-324

Abstract: Abstract In this article, an approach to detect collusive conduct at the firm level is proposed, which consists of comparing implied marginal costs under alternative approaches that focus on (i) demand estimation and the assumption that firms maximize own profits; and (ii) cost estimation and the assumption that firms minimize costs. If firms cooperate and assumption (i) is violated, cost estimates start to diverge. Based on this divergence, a switching regression technique is employed to detect deviations from a competitive equilibrium. This method is empirically tested using data on Swedish truck manufacturer Scania.

Keywords: Cartel detection; Cartel prosecution; Switching regression; Conduct parameter (search for similar items in EconPapers)
JEL-codes: L1 L2 L40 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s11151-024-09968-8

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