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Market Shares as Collusive Marker: Evidence from the European Truck Industry

Andreas Bovin and Iwan Bos

No 11, Research Memorandum from Maastricht University, Graduate School of Business and Economics (GSBE)

Abstract: Collusion theory robustly predicts non-cartel rivals to raise their price and increase their output. As the typical cartel cuts back production, its competitors are expected to gain market share during the collusive period and to lose market share in the period following the cartel's demise. We provide empirical support for this prediction by showing that it applied to the European truck cartel. We also illustrate how our analysis can be used in the prosecution stage. One truck manufacturer denied cartel participation, whereas the proposed market share test supports the European Commission's finding that this firm was, in fact, a member.

JEL-codes: L10 L40 (search for similar items in EconPapers)
Date: 2023-07-11
New Economics Papers: this item is included in nep-com, nep-ind, nep-reg and nep-tre
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Persistent link: https://EconPapers.repec.org/RePEc:unm:umagsb:2023011

DOI: 10.26481/umagsb.2023011

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