The Pro-Collusive Effect of Increasing the Repose Period for Price Fixing Agreements
Tinbergen Institute Discussion Paper No. 2005-104/1
13 Pages Posted: 28 Nov 2005
Date Written: November 2005
Abstract
Intuitively, extending the period of repose for price fixing agreements enhances the effectiveness of competition policy enforcement. This paper proofs this intuition wrong. As extending the repose period reduces cartel members' defection payoff while it leaves unaltered expected compliance profits, it induces cartels to be more stable internally.
Keywords: cartel stability, detection probabilities, statue of limitation
JEL Classification: K21, K42, L12, L41
Suggested Citation: Suggested Citation
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