Post-Cartel Tacit Collusion: Determinants, Consequences, and Prevention

Subhasish Chowdhury and Carsten Crede
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Carsten Crede: Centre for Competition Policy, Centre for Behavioural and Experimental Social Science and School of Economics, University of East Anglia

No 2015-01v2, Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) from Centre for Competition Policy, University of East Anglia, Norwich, UK.

Abstract: We experimentally investigate the attributes and effects of post-cartel tacit collusion (PCTC) as well as policy measures aimed at its prevention. PCTC occurs irrespective of the absence or presence of an antitrust authority and in different competition regimes. PCTC is determined both by collusive price hysteresis and learning about cartel partners’ characteristics and strategies. As a result, it is strongly related with the preceding cartel success. The estimation of cartel overcharges, an important factor in litigation, is found out to be biased downwards in the presence of PCTC. As a policy note, we show that debarment of managers involved in cartels from the market can prevent PCTC.

Keywords: tacit collusion; antitrust; cartels; price hysteresis; experiment (search for similar items in EconPapers)
JEL-codes: C91 D03 D43 L13 L41 (search for similar items in EconPapers)
Date: 2015-11-01
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Citations: View citations in EconPapers (6)

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Related works:
Journal Article: Post-cartel tacit collusion: Determinants, consequences, and prevention (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:uea:ueaccp:2015_01v2

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