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Cartels Uncovered

Frode Steen, Otto Toivanen and Ari Hyytinen

No 7761, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: How many cartels are there? The answer is important in assessing the efficiency of competition policy. We present a Hidden Markov Model that answers the question, taking into account that often we do not know whether a cartel exists in an industry or not. Our model identifies key policy parameters from data generated under different competition policy regimes and may be used with time-series or panel data. We take the model to data from a period of legal cartels - Finnish manufacturing industries 1951 - 1990. Our estimates suggest that by the end of the period, almost all industries were cartelized.

Keywords: Antitrust; Cartel; Competition; Detection; Hidden markov models; Illegal; Legal; Leniency; Policy; Registry (search for similar items in EconPapers)
JEL-codes: L0 L4 L40 L41 L60 (search for similar items in EconPapers)
Date: 2010-03
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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