57 Pages Posted: 26 Feb 2013
Date Written: February 2013
We study cartel contracts using data on 18 contract clauses of 109 legal Finnish manufacturing cartels. One third of the clauses relate to raising profits; the others deal with instability through incentive compatibility, cartel organization, or external threats. Cartels use three main approaches to raise profits: Price, market allocation, and specialization. These appear to be substitutes. Choosing one has implications on how cartels deal with instability. Simplifying, we find that large cartels agree on prices, cartels in homogenous goods industries allocate markets, and small cartels avoid competition through specialization.
Keywords: antitrust, cartels, competition policy, contracts, industry heterogeneity
JEL Classification: K12, L40, L41
Suggested Citation: Suggested Citation
Hyytinen, Ari and Steen, Frode and Toivanen, Otto, Anatomy of Cartel Contracts (February 2013). CEPR Discussion Paper No. DP9362. Available at SSRN: https://ssrn.com/abstract=2224287
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