Industry Dynamics with Cartels: The Case of the Container Shipping Industry

Suguru Otani

Papers from arXiv.org

Abstract: This paper studies how shipping conferences---explicit cartels---shaped container shipping through prices, entry, and investment from 1973--1990. I estimate a structural model to disentangle static pricing and internal allocation effects from dynamic entry and investment responses. \textcolor{black}{Estimated price wedges equal 30--70\% of mean observed freight rates, and conference rents encouraged entry and shipbuilding.} \textcolor{black}{Removing the conference regime barely changes consumer plus producer surplus but raises net social welfare across markets by reducing resource costs.} For fixed route quantity, \textcolor{black}{the capacity-proportional benchmark allocation} equalizes members' marginal costs, but alternative quota tilts produce different dynamic welfare rankings across markets.

Date: 2024-07, Revised 2026-07
New Economics Papers: this item is included in nep-com, nep-ind and nep-reg
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