Modeling the Birth and Death of Cartels with an Application to Evaluating Competition Policy

Joseph E. Harrington and Myong-Hun Chang ()

Journal of the European Economic Association, 2009, vol. 7, issue 6, 1400-1435

Abstract: One of the primary challenges to measuring the impact of antitrust or competition policy on collusion is that the cartel population is unobservable; we observe only the population of discovered cartels. To address this challenge, a model of cartel creation and dissolution is developed to endogenously derive the populations of cartels and discovered cartels. With this theory, one can infer the impact of competition policy on the population of cartels by measuring its impact on the population of discovered cartels. In particular, changes in the duration of discovered cartels can be informative in assessing whether a new policy is reducing the latent rate of cartels. (JEL: L13, L41) (c) 2009 by the European Economic Association.

JEL-codes: L13 L41 (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (73)

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Persistent link: https://EconPapers.repec.org/RePEc:tpr:jeurec:v:7:y:2009:i:6:p:1400-1435

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