Price-Fixing Hits Home: An Empirical Study of U.S. Price Fixing Conspiracies

36 Pages Posted: 17 Nov 2015

See all articles by Margaret C. Levenstein

Margaret C. Levenstein

University of Michigan at Ann Arbor - Survey Research Center; The Stephen M. Ross School of Business at the University of Michigan, Business Economics and Public Policy

Valerie Y. Suslow

Johns Hopkins University - Carey Business School

Date Written: November 2015

Abstract

This paper analyzes all Section 1, Sherman Act price fixing cases brought by the U.S. Department of Justice between 1961 and 2013. Over 500 cartels were prosecuted during this period. The determinants of cartel formation and cartel breakup are estimated, including analysis of the impact of the discount rate, business cycles, and antitrust policy. We find that cartels are more likely to breakup during periods of high real interest rates, presumably because higher interest rates are associated with greater impatience. The adoption of a stronger amnesty policy has no significant impact on cartel breakup over this period, although the results suggest some association with lower cartel formation rates.

Keywords: cartel duration, cartel formation, leniency, antitrust, competition policy

JEL Classification: D34, L13, L41

Suggested Citation

Levenstein, Margaret C. and Suslow, Valerie Y., Price-Fixing Hits Home: An Empirical Study of U.S. Price Fixing Conspiracies (November 2015). Ross School of Business Paper No. 1290. Available at SSRN: https://ssrn.com/abstract=2691579 or http://dx.doi.org/10.2139/ssrn.2691579

Margaret C. Levenstein (Contact Author)

University of Michigan at Ann Arbor - Survey Research Center ( email )

500 S. State Street
Ann Arbor, MI 48109
United States
734-615-9088 (Phone)
734-647-1186 (Fax)

HOME PAGE: http://www-personal.umich.edu/~maggiel

The Stephen M. Ross School of Business at the University of Michigan, Business Economics and Public Policy

Ann Arbor, MI 48109
United States
734-764-8336 (Phone)

Valerie Y. Suslow

Johns Hopkins University - Carey Business School ( email )

100 International Drive
Baltimore, MD 21202
United States

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