 Does Rigidity of Prices Hide Collusion?Juan Jiménez González and Jordi Perdiguero No 201120, IREA Working Papers from University of Barcelona, Research Institute of Applied Economics Abstract: Cartel detection is one of the most basic and most complicated tasks of competition authorities. In recent years, however, variance filters have provided a fairly simple tool for rejecting the existence of price-fixing, with the added advantage that the methodology requires only a low volume of data. In this paper we analyze two aspects of variance filters: (i) the relationship established between market structure and price rigidity, and (ii) the use of different benchmarks for implementing the filters. This paper addresses these two issues by applying a variance filter to a gasoline retail market characterized by a set of unique features. Our results confirm the positive relationship between monopolies and price rigidity, and the variance filter's ability to detect non-competitive behavior when an appropriate benchmark is used. Our findings should serve to promote the implementation of this methodology among competition authorities, albeit in the awareness that a more exhaustive complementary analysis is required. Keywords: Competition Policy; Gasoline; Gibbs sampling; Variance filter JEL classification:L13; L59; L71. (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ira:wpaper:201120 Access Statistics for this paper More papers in IREA Working Papers from University of Barcelona, Research Institute of Applied Economics Contact information at EDIRC. |
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