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A Variance Screen for Collusion

27 Pages Posted: 7 Apr 2005  

Rosa M. Abrantes-Metz

Global Economics Group, LLC; New York University - Leonard N. Stern School of Business - Department of Economics

Christopher T. Taylor

U.S. Federal Trade Commission - Bureau of Economics

Luke Froeb

Vanderbilt University - Strategy and Business Economics

John Geweke

University of Technology Sydney - Economics Discipline Group

Date Written: March 2005

Abstract

In this paper, we examine price movements over time around the collapse of a bid-rigging conspiracy. While the mean decreased by sixteen percent, the standard deviation increased by over two hundred percent. We hypothesize that conspiracies in other industries would exhibit similar characteristics and search for "pockets" of low price variation as indicators of collusion in the retail gasoline industry in Louisville. We observe no such areas around Louisville in 1996-2002.

Keywords: Collusion, Price Fixing, Firms, Firm

JEL Classification: L12, L41, D40

Suggested Citation

Abrantes-Metz, Rosa M. and Taylor, Christopher T. and Froeb, Luke and Geweke, John, A Variance Screen for Collusion (March 2005). Vanderbilt Law and Economics Research Paper No. 05-13; FTC Bureau of Economics Working Paper No. 275. Available at SSRN: https://ssrn.com/abstract=683922 or http://dx.doi.org/10.2139/ssrn.683922

Rosa M. Abrantes-Metz (Contact Author)

Global Economics Group, LLC ( email )

22 Cortlandt Street
Suite 1600
New York, NY 10007
United States
(917) 499-4944 (Phone)

HOME PAGE: http://www.globaleconomicsgroup.com

New York University - Leonard N. Stern School of Business - Department of Economics ( email )

269 Mercer Street
New York, NY 10003
United States

Christopher T. Taylor

U.S. Federal Trade Commission - Bureau of Economics ( email )

601 Pennsylvania Avenue, NW
Antitrust Division
Washington, DC 20580
United States

Luke M. Froeb

Vanderbilt University - Strategy and Business Economics ( email )

Nashville, TN 37203
United States
615-322-9057 (Phone)
615-343-7177 (Fax)

John Geweke

University of Technology Sydney - Economics Discipline Group ( email )

645 Harris Street
Sydney, NSW 2007
Australia
0295149797 (Phone)

HOME PAGE: http://www.censoc.uts.edu.au/about/members/jgeweke_papers.html

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