Implicit Collusion Models of Export Pricing: An Econometric Application to the Japanese Case

Eiichi Tomiura

Kobe Economic & Business Review, 2005, vol. 49, 51-68

Abstract: This paper examines export competition by interpreting observed export price variations over time as a result of dynamic changes in the sustainability of implicit collusion among ecporters. One model focuses on unpredictable negative shocks on demand as in Green and Porter (1984), while exchange rate fluctuation is emphasized in the altemative model as in Rotemberg and Saloner (1986). The regime classification dummy, which follows a Markov transition process, is estimated endogenously. Switches in export pricing are detected in some of the Japanese industries, especially in textiles.

Keywords: Implicit collusion; Export price; Switching regression (search for similar items in EconPapers)
JEL-codes: D43 F12 F14 L16 (search for similar items in EconPapers)
Date: 2005
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