NDLI: Equilibrium Cartel Pricing in the Presence of an Antitrust Authority

Content Provider	Semantic Scholar
Author	Harrington, Joseph E.
Copyright Year	2002
Abstract	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 the sensitivity of penalties to the price level induces the cartel to lower price over time in order to maintain the stability of the cartel. While antitrust laws can lower collusive prices, they can also raise them by making it easier for firms to collude. ∗I appreciate the comments of seminar participants at Cal Tech, UC-Berkeley, Stanford, and the Duke/UNC Theory Workshop. This research is supported by the National Science Foundation under grant SES-0209486.
File Format	PDF HTM / HTML
Alternate Webpage(s)	https://economics.yale.edu/sites/default/files/files/Workshops-Seminars/Industrial-Organization/harrington-020926.pdf
Language	English
Access Restriction	Open
Content Type	Text
Resource Type	Article

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