ECONOMETRIC EVIDENCE TO TARGET TACIT COLLUSION IN OLIGOPOLISTIC MARKETS

Patrick Andreoli-Versbach () and Jens-Uwe Franck

Journal of Competition Law and Economics, 2015, vol. 11, issue 2, 463-492

Abstract: Tacit collusion may reduce welfare comparably to explicit collusion, but it remains mostly unaddressed by antitrust enforcement that greatly depends on evidence of explicit communication. We propose to target specific elements of firms' behavior that facilitate tacit collusion by providing quantitative evidence that links these actions to an anticompetitive market outcome. We apply our approach to incidents on the Italian gasoline market, where the market leader unilaterally announced its commitment to a policy of sticky pricing and large price changes that facilitated price alignment and coordination of price changes. Antitrust policy must distinguish such active promotion of a collusive strategy from passive, best-response, alignment. Our results imply the necessity of stronger legal instruments that target unilateral conduct that aims at bringing about collusion.

JEL-codes: K21 K42 L13 L41 L71 (search for similar items in EconPapers)
Date: 2015
References: Add references at CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:oup:jcomle:v:11:y:2015:i:2:p:463-492.

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Journal of Competition Law and Economics is currently edited by Nicholas Economides, Amelia Fletcher, Michal Gal, Damien Geradin, Ioannis Lianos and Tommaso Valletti

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