What Can the Duration of Discovered Cartels Tell Us About the Duration of All Cartels?
44 Pages Posted: 18 Nov 2014 Last revised: 10 Apr 2015
Date Written: April 9, 2015
Estimates of average cartel duration and the annual probability of cartel death are based on data for discovered cartels. It is recognized that these estimates could be biased because the population of discovered cartels may not be a representative sample of the latent population of cartels. This paper constructs a birth-death-discovery process to theoretically investigate the source and direction of possible biases. The model is then estimated and Bayesian inference is used to provide bounds on the extent of the bias and deliver an improved estimate of the probability of cartel death.
Keywords: Cartel detection, Collusion, Antitrust
JEL Classification: L1, L4
Suggested Citation: Suggested Citation