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

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  • Jeroen Hinloopen

    ()
    (Faculty of Economics and Econometrics, Universiteit van Amsterdam)

Abstract

Intuitively, extending the period of repose for price fixing agreements enhances the effectiveness of competition policy enforcement. This paper proofs 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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Bibliographic Info

Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 05-104/1.

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Date of creation: 14 Nov 2005
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Handle: RePEc:dgr:uvatin:20050104

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Web page: http://www.tinbergen.nl

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Keywords: Cartel stability; detection probabilities; statue of limitation.;

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  1. Friedman, James W, 1971. "A Non-cooperative Equilibrium for Supergames," Review of Economic Studies, Wiley Blackwell, vol. 38(113), pages 1-12, January.
  2. Philippe Cyrenne, 1999. "On Antitrust Enforcement and the Deterrence of Collusive Behaviour," Review of Industrial Organization, Springer, vol. 14(3), pages 257-272, May.
  3. 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.
  4. John M. Connor, 2004. "Global Antitrust Prosecutions Of Modern International Cartels," Working Papers 04-15, Purdue University, College of Agriculture, Department of Agricultural Economics.
  5. 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.
  6. Spagnolo, Giancarlo, 2004. "Divide et Impera: Optimal Leniency Programmes," CEPR Discussion Papers 4840, C.E.P.R. Discussion Papers.
  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.
  8. Hinloopen, Jeroen, 2006. "Internal cartel stability with time-dependent detection probabilities," International Journal of Industrial Organization, Elsevier, vol. 24(6), pages 1213-1229, November.
  9. repec:reg:briefs:391 is not listed on IDEAS
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