Measuring the Incentive to Collude: The Vitamin Cartels, 1990–99
| Autor: | Mitsuru Igami, Takuo Sugaya |
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| Rok vydání: | 2021 |
| Předmět: | |
| Zdroj: | The Review of Economic Studies. 89:1460-1494 |
| ISSN: | 1467-937X 0034-6527 |
| DOI: | 10.1093/restud/rdab052 |
| Popis: | Do mergers help or hinder collusion? This article studies the stability of the vitamin cartels in the 1990s and presents a repeated-games approach to quantify “coordinated effects” of a merger. We use data and direct evidence from American courts and European agencies to show the collusive incentive of the short-lived vitamin C cartel was likely to be negative when it actually collapsed in 1995, whereas the incentives of the long-lived cartels (vitamins A and E, and beta carotene) were unambiguously positive until the prosecution in 1999. Simulations suggest some mergers could have prolonged the vitamin C cartel, but others could have further destabilized it, because both the direction and magnitude of coordinated effects depend not only on the number of firms but also on their cost asymmetry. |
| Databáze: | OpenAIRE |
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