EconPapers    
Economics at your fingertips  
 

Vertical Restraints in the Bromine Cartel: The Role of Distributors in Facilitating Collusion

Margaret Levenstein

No 49, NBER Historical Working Papers from National Bureau of Economic Research, Inc

Abstract: From 1885 to 1902 manufacturers and distributors in the American bromine industry cooperated to increase prices and profits. Like many sectors of the American economy at the time, the bromine industry was made up a large number of small manufacturers and a small number of national distributors. The manufacturers agreed to pool their output and sell only to two distributors. The distributors accumulated excess inventories rather than let the market price fall, but then used those inventories as a threat to deter cheating and new entry. Industry participants designed contracts to balance fluctuations in the costs and benefits from cheating. These contracts succeeded in stabilizing collusion until the entry of new, vertically integrated, mass production firm led to its demise.

JEL-codes: L13 N61 (search for similar items in EconPapers)
Date: 1993-07
Note: DAE IO
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed

Downloads: (external link)
http://www.nber.org/papers/h0049.pdf (application/pdf)

Related works:
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:nbr:nberhi:0049

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/h0049

Access Statistics for this paper

More papers in NBER Historical Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2019-05-12
Handle: RePEc:nbr:nberhi:0049