Frode Steen and
Otto Toivanen ()
No 7761, CEPR Discussion Papers from C.E.P.R. Discussion Papers
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)
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Journal Article: Cartels Uncovered (2018)
Working Paper: Cartels Uncovered (2010)
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