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- Title
OPTIMAL CARTEL PRICING IN THE PRESENCE OF AN ANTITRUST AUTHORITY.
- Authors
Harrington, Joseph E.
- Abstract
The dynamic behavior of a price-fixing cartel is explored when it is concerned about creating suspicions that a cartel has formed. Consistent with preceding static theories, the cartel's steady-state price is decreasing in the damage multiple and the probability of detection. However, contrary to those theories, it is independent of the level of fixed fines. It is also shown that the cartel prices higher when a more competitive benchmark price is used in calculating damages.
- Subjects
CARTELS; INDUSTRIAL concentration; ECONOMIC competition; PRICES; PROBABILITY theory; ANTITRUST law
- Publication
International Economic Review, 2005, Vol 46, Issue 1, p145
- ISSN
0020-6598
- Publication type
Article
- DOI
10.1111/j.0020-6598.2005.00313.x