University of Jyväskylä - School of Business and Economics
Norwegian School of Economics (NHH) - Department of Economics
KU Leuven - Faculty of Business and Economics (FBE); CEPR
March 16, 2010
NHH Dept. of Economics Discussion Paper No. 10/2010
How many cartels are there? The answer is important in assessing the efficiency of competition policy. We present a Hidden Markov Model that answers the question, taking into account that often we do not know whether a cartel exists in an industry or not. Our model identifies key policy parameters from data generated under different competition policy regimes and may be used with time-series or panel data. We take the model to data from a period of legal cartels - Finnish manufacturing industries 1951-1990. Our estimates suggest that by the end of the period, almost all industries were cartelized.
Number of Pages in PDF File: 49
Keywords: Antitrust, cartel, competition, detection, Hidden Markov models.
JEL Classification: L0, L4, L40, L41, L60.working papers series
Date posted: March 25, 2010
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