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Sustainability of collusion: evidence from the late 19th century basque iron and steel industry

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Author Info

  • Pedro Mendi

    (Universidad de Navarra)

  • Róbert F. Veszteg

    (Universidad Carlos III de Madrid)

Abstract

We examine the minutes of the executive committees of two Basque firms in the iron and steel industry, Altos Hornos de Bilbao and Vizcaya, to discuss the relevance of di􀀞erent factors on the survival and failure of the collusive agreements reached in the industry from 1886 to 1901. We observe intense communication among colluding parties during and after collusive arrangements. Collusion seems to be more likely to break down in periods of falling demand, while strong demand provides these agreements with stability. Additionally, the presence of centralized sales agencies, and similar degrees of vertical integration among colluding firms facilitate collusion.

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File URL: ftp://ftp.fundacionsepi.es/InvEcon/paperArchive/Sep2009/v33i3a3.pdf
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Bibliographic Info

Article provided by Fundación SEPI in its journal Investigaciones Económicas.

Volume (Year): 33 (2009)
Issue (Month): 3 (September)
Pages: 385-405

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Handle: RePEc:iec:inveco:v:33:y:2009:i:3:p:385-405

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Postal: Investigaciones Economicas Fundación SEPI Quintana, 2 (planta 3) 28008 Madrid Spain
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Related research

Keywords: Market power; collusion; iron and steel industry.;

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References

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  1. Genesove, David & Mullin, Wallace P, 2001. "Rules, Communication and Collusion: Narrative Evidence from the Sugar Institute Case," CEPR Discussion Papers 2739, C.E.P.R. Discussion Papers.
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  17. Pedro Mendi & Róbert Veszteg, 2007. "Profitable mergers with endogenous tariffs," Economics Bulletin, AccessEcon, vol. 12(23), pages 1-8.
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Citations

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Cited by:
  1. Pedro Mendi & Rafael Moner-Colonques & José Sempere-Monerris, 2011. "Vertical integration, collusion, and tariffs," SERIEs, Spanish Economic Association, vol. 2(3), pages 359-378, September.
  2. Pedro Mendi & Róbert Veszteg, 2007. "Profitable mergers with endogenous tariffs," Economics Bulletin, AccessEcon, vol. 12(23), pages 1-8.
  3. Andrei Y. Shastitko & Svetlana V. Golovanova, 2014. "Collusion in markets characterized by one large buyer: lessons learned from an antitrust case in Russia," HSE Working papers WP BRP 49/EC/2014, National Research University Higher School of Economics.

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