The Effects of Competition: Cartel Policy and the Evolution of Strategy and Structure in British Industry. By George Symeonidis. Cambridge, MA: MIT Press. Pp. x, 542. $55.00.

Abstract

This book provides a detailed investigation of the impact of the 1956 Restrictive Trade Practices Act on the intensity of competition in the United Kingdom. In my experience, American economists are usually traumatized to discover that the 1956 Act allowed firms to register restrictive trade agreements, including explicit schemes to fix prices and that by the end of 1959, firms had registered 2,240 agreements in the clear expectation that the newly established Restrictive Practices Court would take a relaxed view about these restrictions on competition. In fact, the Court generally took a tough pro-competition stance and after a few landmark cases where restrictive agreements were judged to be against the public interest, many of the registered agreements were abandoned voluntarily or modified substantially. This episode thus provides the raw material for assessing the impact of an intensification of competition on economic performance. George Symeonidis uses the theoretical framework of John Sutton to assess the effects of this intensification of competition. The main focus is on the upshot for concentration, although the effects on advertising intensity, innovation, and profitability are also considered. Disappointingly, perhaps, there is no discussion of the effects on productivity.