Cartel Pricing Dynamics in the Presence of an Antitrust Authority

Joseph Harrington ()

Economics Working Paper Archive from The Johns Hopkins University,Department of Economics

Abstract: Price-fixing is characterized when firms are concerned about creating suspicions that a cartel has formed. Antitrust laws have a complex effect on pricing as they interact with the conditions determining the internal stability of the cartel. Dynamics are driven by two forces - the sensitivity of detection to price movements causes a cartel to gradually raise price while the sensitivity of penalties to the price level induces the cartel to lower price over time in order to maintain the stability of the cartel. While antitrust laws can lower collusive prices, they can also raise them by making it easier for firms to collude.

Date: 2002-12, Revised 2003-05
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.econ2.jhu.edu/REPEC/papers/WP487_harrington.pdf (application/pdf)

Related works:
Journal Article: Cartel Pricing Dynamics in the Presence of an Antitrust Authority (2004)
Working Paper: Cartel Pricing Dynamics in the Presence of an Antitrust Authority (2003)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:jhu:papers:487

Access Statistics for this paper

More papers in Economics Working Paper Archive from The Johns Hopkins University,Department of Economics 3400 North Charles Street Baltimore, MD 21218. Contact information at EDIRC.
Bibliographic data for series maintained by Humphrey Muturi ().