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Price Wars and the Stability of Collusion: A Study of the Pre-World War I Bromine Industry

Margaret Levenstein

No 50, NBER Historical Working Papers from National Bureau of Economic Research, Inc

Abstract: Bromine producers colluded to raise prices and profits during most of the period between 1885 and 1914. Collusion was punctuated by price wars in which prices fell sharply. The characteristics of these price wars are compared with those in the Green-Porter and Abreu- Pearce-Stachetti models. Some of the bromine price wars resulted from the imperfect monitoring problems in these models. Those price wars were short and mild. More severe price wars were part of a bargaining process, in which firms tried to force a renegotiation to a new collusive equilibrium with a different distribution of rents.

JEL-codes: L13 N61 (search for similar items in EconPapers)
Date: 1993-09
Note: DAE
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Published as Journal of Industrial Economics, Vol. 45, no. 2: 117-137 (1997)

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