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The Pro-collusive Effect of Increasing the Repose Period for Price Fixing Agreements

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Author Info
Jeroen Hinloopen (Universiteit van Amsterdam and Katholieke Universiteit Leuven)

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Abstract

Intuitively, extending the period of repose for price fixing agreements enhances the effectiveness of competition policy enforcement. This paper proves this intuition wrong. As extending the repose period reduces cartel members' defection payoff while it leaves unaltered expected compliance profits, it induces cartels to be more stable internally.

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Publisher Info
Article provided by Berkeley Electronic Press in its journal Contributions to Economic Analysis & Policy.

Volume (Year): 7 (2007)
Issue (Month): 1 ()
Pages: 1135-1135
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Handle: RePEc:bep:eapcon:v:7:y:2007:i:1:p:1135-1135

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Related research
Keywords: cartel stability detection probabilities statue of limitation

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Find related papers by JEL classification:
K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law

References listed on IDEAS
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  1. Joseph E. Harrington, Jr., 2004. "Cartel Pricing Dynamics in the Presence of an Antitrust Authority," RAND Journal of Economics, The RAND Corporation, vol. 35(4), pages 651-673, Winter.
    Other versions:
  2. John M. Connor, 2004. "Global Antitrust Prosecutions Of Modern International Cartels," Working Papers 04-15, Purdue University, College of Agriculture, Department of Agricultural Economics. [Downloadable!]
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  3. Philippe Cyrenne, 1999. "On Antitrust Enforcement and the Deterrence of Collusive Behaviour," Review of Industrial Organization, Springer, vol. 14(3), pages 257-272, May. [Downloadable!] (restricted)
  4. Friedman, James W, 1971. "A Non-cooperative Equilibrium for Supergames," Review of Economic Studies, Blackwell Publishing, vol. 38(113), pages 1-12, January. [Downloadable!] (restricted)
  5. Hinloopen, Jeroen, 2006. "Internal cartel stability with time-dependent detection probabilities," International Journal of Industrial Organization, Elsevier, vol. 24(6), pages 1213-1229, November. [Downloadable!] (restricted)
  6. Bryant, Peter G & Eckard, E Woodrow, Jr, 1991. "Price Fixing: The Probability of Getting Caught," The Review of Economics and Statistics, MIT Press, vol. 73(3), pages 531-36, August. [Downloadable!] (restricted)
  7. Jeroen Hinloopen & Adriaan Soetevent, 2006. "Trust and Recidivism; the Partial Success of Corporate Leniency Program in the Laboratory," Tinbergen Institute Discussion Papers 06-067/1, Tinbergen Institute. [Downloadable!]
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