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Collusion with Asymmetric Retailers: Evidence from a Gasoline Price-Fixing Case

Author

Listed:
  • Robert Clark
  • Jean-Fran?ois Houde

Abstract

We point out a fundamental difficulty of successfully colluding in retail markets with heterogeneous fi rms, and characterize the mechanism recent gasoline cartels in Canada used to sustain collusion. Heterogeneity in cost and network size necessitates arrangements whereby participants split the market unequally to favor stronger players. We characterize empirically the strategy and transfer mechanism using court documents containing summaries and extracts of conversations between participants. The mechanism implements transfers based on adjustment delays during price changes. We estimate that these delays can translate into substantial transfers and provide examples in which they can substantially reduce deviation frequency.

Suggested Citation

  • Robert Clark & Jean-Fran?ois Houde, 2013. "Collusion with Asymmetric Retailers: Evidence from a Gasoline Price-Fixing Case," American Economic Journal: Microeconomics, American Economic Association, vol. 5(3), pages 97-123, August.
  • Handle: RePEc:aea:aejmic:v:5:y:2013:i:3:p:97-123
    Note: DOI: 10.1257/mic.5.3.97
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    More about this item

    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • L71 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Hydrocarbon Fuels
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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    1. Collusion with Asymmetric Retailers: Evidence from a Gasoline Price-Fixing Case (AEJ:MI 2013) in ReplicationWiki

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