Cartel Stability and Economic Integration
AbstractThis 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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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Review of International Economics.
Volume (Year): 15 (2007)
Issue (Month): 2 (05)
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0965-7576
Other versions of this item:
- F15 - International Economics - - Trade - - - Economic Integration
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
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