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Cartel Stability and Economic Integration

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Author Info
Philipp J. H. Schröder

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Abstract

This paper revisits the notion that economic integration-modeled as a reduction of trade costs-may be anticompetitive, in the sense that it may reinforce the ability of an international cartel to maintain a collusive understanding about staying out of each other's markets. The paper is novel in terms of introducing ad valorem and fixed trade costs in addition to the customary unit trade costs. It is shown that an anticompetitive effect, found for reductions in unit trade costs, may disappear once trade costs are ad valorem or fixed. Copyright © 2007 The Author; Journal compilation © 2007 Blackwell Publishing Ltd.

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File URL: http://www.blackwell-synergy.com/links/doi/10.1111/j.1467-9396.2007.00646.x
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Publisher Info
Article provided by Blackwell Publishing in its journal Review of International Economics.

Volume (Year): 15 (2007)
Issue (Month): 2 (05)
Pages: 313-320
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Handle: RePEc:bla:reviec:v:15:y:2007:i:2:p:313-320

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Smith, Alasdair & Venables, Anthony J., 1988. "Completing the Internal Market in the European Community: Some Industry Simulations," CEPR Discussion Papers 233, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  2. Andrew K. Rose, 2000. "One money, one market: the effect of common currencies on trade," Economic Policy, CEPR, CES, MSH, vol. 15(30), pages 7-46, 04. [Downloadable!] (restricted)
  3. Davidson, Carl, 1984. "Cartel stability and tariff policy," Journal of International Economics, Elsevier, vol. 17(3-4), pages 219-237, November. [Downloadable!] (restricted)
  4. Lommerund, K.E. & Sorgard, L., 1998. "Trade Liberalization and Cartel Stability," Norway; Department of Economics, University of Bergen 0198, Department of Economics, University of Bergen.
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  5. McCallum, John, 1995. "National Borders Matter: Canada-U.S. Regional Trade Patterns," American Economic Review, American Economic Association, vol. 85(3), pages 615-23, June. [Downloadable!] (restricted)
  6. Julio J. Rotemberg & Garth Saloner, 1989. "Tariffs vs Quotas with Implicit Collusion," Canadian Journal of Economics, Canadian Economics Association, vol. 22(2), pages 237-44, May. [Downloadable!] (restricted)
  7. Constantinos Syropoulos & Eric Bond, 2003. "Is the Tariff the ‘Mother of Trusts’? Reciprocal Trade Liberalization with Multimarket Collusion," Working Papers 0310, Florida International University, Department of Economics. [Downloadable!]
  8. Chris Allen & Michael Gasiorek & Alasdair Smith, 1998. "The competition effects of the Single Market in Europe," Economic Policy, CEPR, CES, MSH, vol. 13(27), pages 439-486, October. [Downloadable!] (restricted)
  9. Fung, K C, 1992. "Economic Integration as Competitive Discipline," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 33(4), pages 837-47, November. [Downloadable!] (restricted)
  10. Baier, Scott L. & Bergstrand, Jeffrey H., 2001. "The growth of world trade: tariffs, transport costs, and income similarity," Journal of International Economics, Elsevier, vol. 53(1), pages 1-27, February. [Downloadable!] (restricted)
  11. Schröder, Philipp J.H. & Jørgensen, Jan G., 2001. "Reductions in Real versus Tariff Barriers: The Effects on Industry Concentration," MPRA Paper 124, University Library of Munich, Germany. [Downloadable!]
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