Cartel Stability: An Empirical Analysis

56 Pages Posted: 22 Oct 2006

See all articles by Yuliya Bolotova

Yuliya Bolotova

University of Idaho

John M. Connor

Purdue University; American Antitrust Institute (AAI)

Douglas J. Miller

University of Missouri at Columbia - Department of Economics

Date Written: October 2006

Abstract

Using the data on 238 cartelized markets we evaluate econometrically the impact of cartel characteristics as well the market and legal environment of cartel operation on cartel stability. The latter is measured as the expected number of repeated attempts to form a cartel in the same product market. We analyze the behavior of guilty (sanctioned) cartels relative to legal cartels. We find that global cartels are less stable than local cartels. Cartels operating in the countries with developed antitrust law are more stable than cartels operating in the countries without similar regulation. As antitrust law regimes become stricter, sanctioned cartels become less stable. If the average duration of cartel episode is relatively short, the cartel is more likely to make another attempt to collude. If a cartel manages to impose a relatively high level of overcharge, the cartel is less likely to repeat collusive conduct.

Keywords: antitrust, cartels, collusion, Poisson model, recidivism

JEL Classification: L1, L2, L4, L6, L7, L8, L9

Suggested Citation

Bolotova, Yuliya and Connor, John M. and Connor, John M. and Miller, Douglas J., Cartel Stability: An Empirical Analysis (October 2006). Available at SSRN: https://ssrn.com/abstract=939078 or http://dx.doi.org/10.2139/ssrn.939078

Yuliya Bolotova (Contact Author)

University of Idaho ( email )

875 Perimeter Drive
Moscow, ID 83844
United States

John M. Connor

Purdue University ( email )

333 Massachusetts Ave.
UNIT 505
Indianapolis, IN 46204
United States
+1 463-221-1692 (Phone)

American Antitrust Institute (AAI) ( email )

1730 Rhode Island Avenue, NW
Suite 1100
Washington, DC 20036
United States
202-536-3408 (Phone)

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

Douglas J. Miller

University of Missouri at Columbia - Department of Economics ( email )

118 Professional Building
Columbia, MO 65211
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
484
Abstract Views
2,488
rank
74,387
PlumX Metrics