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Collusive Networks in Market-Sharing Agreements Under the Presence of an Antitrust Authority

34 Pages Posted: 21 Apr 2010  

Flavia Roldan

Public-Private Sector Research Center, IESE Business

Date Written: April 15, 2010

Abstract

This article studies how the presence of an antitrust authority affects market-sharing agreements made by firms. These agreements prevent firms from entering each other's market. The set of these agreements defines a collusive network, which is pursued by antitrust authorities. This article shows that while in the absence of the antitrust authority, a network is stable if its alliances are large enough when considering the antitrust authority, and more competitive structures can be sustained through bilateral agreements. Antitrust laws may have a pro-competitive effect, as they give firms in large alliances more incentives to cut their agreements at once.

Keywords: market-sharing, economic networks, antitrust authority, oligopoly

JEL Classification: D43, K21, L41

Suggested Citation

Roldan, Flavia, Collusive Networks in Market-Sharing Agreements Under the Presence of an Antitrust Authority (April 15, 2010). IESE Business School Working Paper No. 854. Available at SSRN: https://ssrn.com/abstract=1593623 or http://dx.doi.org/10.2139/ssrn.1593623

Flavia Roldan (Contact Author)

Public-Private Sector Research Center, IESE Business ( email )

Avenida Pearson 21
Barcelona, 08034
Spain

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