Cartel Pricing Dynamics in the Presence of an Antitrust Authority

Joseph Harrington ()

RAND Journal of Economics, 2004, vol. 35, issue 4, 651-673

Abstract: Cartel pricing is characterized when firms are concerned about creating suspicions that a cartel has formed. Balancing concerns about maintaining the stability of the cartel with those of avoiding detection, the cartel may either (i) gradually raise price to its steady-state level or (ii) gradually raise price and then have it decline to its steady-state level. Antitrust laws may have a perverse effect as they make cartel stability easier and thus allow for higher cartel prices.

Date: 2004
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Working Paper: Cartel Pricing Dynamics in the Presence of an Antitrust Authority (2003)
Working Paper: Cartel Pricing Dynamics in the Presence of an Antitrust Authority (2003)
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