Collusive networks in market-sharing agreements under the presence of an antitrust authority
AbstractThis paper studies how the presence of an antitrust authority affects market-sharing agreements made by firms. These agreements prevent firms from entering each other's market. The set of these agreements defines a collusive network, which is pursued by antitrust authorities. This article shows that while in the absence of the antitrust authority, a network is stable if its alliances are large enough when considering the antitrust authority, and more competitive structures can be sustained through bilateral agreements. Antitrust laws may have a pro-competitive effect, as they give firms in large alliances more incentives to cut their agreements at once.
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Bibliographic InfoPaper provided by IESE Business School in its series IESE Research Papers with number D/854.
Length: 34 pages
Date of creation: 07 Apr 2010
Date of revision:
market-sharing; economic networks; antitrust authorit; oligopoly;
Find related papers by JEL classification:
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
- L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-05-29 (All new papers)
- NEP-COM-2010-05-29 (Industrial Competition)
- NEP-IND-2010-05-29 (Industrial Organization)
- NEP-NET-2010-05-29 (Network Economics)
- NEP-REG-2010-05-29 (Regulation)
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