Abstract
We show how cartels rely on the adaptive social structure of committee meetings to ameliorate the competitive difficulties of markets. We distill the structure of the cartel committee and test hypotheses relating market structure to committee structure and ultimately to the efficacy of cartel price‐fixing. Cartel continuity and the corporate authority of the cartel are strong predictors of cartel effectiveness. Cartel continuity is responsive to market conditions that favor cartel formation. Centralization of cartel authority in decision making results in improved collusive pricing effectiveness. Centralization of cartel authority responds to expanding industry volume that bring about incentives to increase firm level market share at the expense of other cartel members.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
