Optimal Cartel Pricing in the Presence of an Antitrust Authority∗ by Joseph
نویسندگان
چکیده
The dynamic behavior of a price-fixing cartel is explored when it is concerned about creating suspicions that a cartel has formed. Consistent with preceding static theories, the cartel’s steady-state price is decreasing in the damage multiple and the probability of detection. However, contrary to those theories, it is independent of the level of fixed fines. It is also shown that the cartel prices higher when a more competitive benchmark price is used in calculating damages.
منابع مشابه
Equilibrium Cartel Pricing in the Presence of an Antitrust Authority∗
Price-fixing is characterized when firms are concerned about creating suspicions about collusion and bringing forth antitrust penalties. Antitrust laws have a complex effect on pricing as they influence 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 ...
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The dynamic behavior of a price-fixing cartel is explored when it is concerned about creating suspicions that a cartel has formed. The intertemporal structure of the price path is characterized and the effect of antitrust policy on the cartel’s steady-state price is explored. ∗I want to thank Bates, White and Ballantine for re-stimulating my interest in this topic. I’d also like to acknowledge ...
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