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Theories of Cartel Stability and the Joint Executive Committee

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Author Info
Glenn Ellison

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Abstract

This article reexamines the experience of the Joint Executive Committee, an 1880s railroad cartel, to assess the applicability of the Green and Porter (1984) and Rotemberg and Saloner (1986) theories of price wars. After discussing necessary modifications to the theories, I estimate a number of dynamic models to explore the causes of price wars, the cyclical nature of pricing, and the possibility that secret price cuts may have been given. The estimates provide some support for the predictions of the first theory.

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File URL: http://links.jstor.org/sici?sici=0741-6261%28199421%2925%3A1%3C37%3ATOCSAT%3E2.0.CO%3B2-D&origin=repec
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Publisher Info
Article provided by The RAND Corporation in its journal RAND Journal of Economics.

Volume (Year): 25 (1994)
Issue (Month): 1 (Spring)
Pages: 37-57
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Handle: RePEc:rje:randje:v:25:y:1994:i:spring:p:37-57

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This page was last updated on 2008-8-16.


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