Collusion in markets characterized by one large buyer: lessons learned from an antitrust case in Russia
AbstractThis paper demonstrates that even established and verified facts of agreements among producers are not a sufficient condition for cartel identification and, as a consequence, prosecution of agreement participants. Such requires looking at institutional details and the wider context of these and similar appearances or occurrences of documents and actions when qualifying the actions of market participants and their effects. This paper discusses a recent antitrust case brought against Russian manufacturers of large diameter pipes (LDPs) that examined supposedly abusive practices by these firms that were contrary to the law on the Protection of Competition, which prohibits market division. The case under consideration illustrates the importance of investigating institutional details when qualifying the actions of market participants and their effects. An analysis of the materials in this case using modern economic theory indicates that the presence of collusion is inconsistent with the active participation of the main consumer of LDPs in that agreement. The chosen format for the cooperation between pipe manufacturing companies and OJSC Gazprom, namely indicative planning, may be explained from the perspective of reducing contract risk in an environment characterized by large-scale private investments.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by National Research University Higher School of Economics in its series HSE Working papers with number WP BRP 49/EC/2014.
Length: 18 pages
Date of creation: 2014
Date of revision:
Publication status: Published in WP BRP Series: Economics / EC, February 2014, pages 1-18
collusion; antitrust policy; credible commitments; indicative planning; contract risk;
Find related papers by JEL classification:
- K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
- B52 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Institutional; Evolutionary
This paper has been announced in the following NEP Reports:
- NEP-ALL-2014-02-21 (All new papers)
- NEP-CIS-2014-02-21 (Confederation of Independent States)
- NEP-COM-2014-02-21 (Industrial Competition)
- NEP-IND-2014-02-21 (Industrial Organization)
- NEP-LAW-2014-02-21 (Law & Economics)
- NEP-TRA-2014-02-21 (Transition Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Henrik Orzen, 2006.
"Counterintuitive Number Effects in Experimental Oligopolies,"
2006-22, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
- Henrik Orzen, 2008. "Counterintuitive number effects in experimental oligopolies," Experimental Economics, Springer, vol. 11(4), pages 390-401, December.
- Henrik Orzen, 2006. "Counterintuitive Number Effects in Experimental Oligopolies," Discussion Papers 2006-22, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
- Choi, Jay Pil & Gerlach, Heiko, 2012.
"Global cartels, leniency programs and international antitrust cooperation,"
International Journal of Industrial Organization,
Elsevier, vol. 30(6), pages 528-540.
- Jay Pil Choi & Heiko Gerlach, 2010. "Global Cartels, Leniency Programs and International Antitrust Cooperation," CESifo Working Paper Series 3005, CESifo Group Munich.
- Pedro Mendi & Róbert F. Veszteg, 2009.
"Sustainability of collusion: evidence from the late 19th century basque iron and steel industry,"
Fundación SEPI, vol. 33(3), pages 385-405, September.
- Pedro Mendi & Róbert F. Veszteg, . "Sustainability of Collusion: Evidence from the Late 19th Century Basque Iron and Steel Industry," Faculty Working Papers 04/07, School of Economics and Business Administration, University of Navarra.
- Hélder Vasconcelos, 2008.
"Sustaining Collusion in Growing Markets,"
Journal of Economics & Management Strategy,
Wiley Blackwell, vol. 17(4), pages 973-1010, December.
- Abrantes-Metz, Rosa M. & Froeb, Luke M. & Geweke, John & Taylor, Christopher T., 2006. "A variance screen for collusion," International Journal of Industrial Organization, Elsevier, vol. 24(3), pages 467-486, May.
- Paul L. Joskow, 2002. "Transaction Cost Economics, Antitrust Rules, and Remedies," Journal of Law, Economics and Organization, Oxford University Press, vol. 18(1), pages 95-116, April.
- Compte, Olivier & Jenny, Frederic & Rey, Patrick, 2002. "Capacity constraints, mergers and collusion," European Economic Review, Elsevier, vol. 46(1), pages 1-29, January.
- Davidson, Carl & Deneckere, Raymond J, 1990.
"Excess Capacity and Collusion,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 31(3), pages 521-41, August.
- Robert Porter, 2005. "Detecting Collusion," Review of Industrial Organization, Springer, vol. 26(2), pages 147-167, December.
- Korbinian Blanckenburg & Alexander Geist & Konstantin A. Kholodilin, 2012.
"The Influence of Collusion on Price Changes: New Evidence from Major Cartel Cases,"
German Economic Review,
Verein für Socialpolitik, vol. 13(3), pages 245-256, 08.
- Korbinian von Blanckenburg & Alexander Geist & Konstantin A. Kholodilin, 2010. "The Influence of Collusion on Price Changes: New Evidence from Major Cartel Cases," Discussion Papers of DIW Berlin 1004, DIW Berlin, German Institute for Economic Research.
- Alexander Geist & Korbinian Blanckenburg, 2011. "Cartel detection — Is market share volatility a significant indicator?," Intereconomics: Review of European Economic Policy, Springer, vol. 46(4), pages 217-221, August.
- Alger, Dan, 1987. "Laboratory Tests of Equilibrium Predictions with Disequilibrium Data," Review of Economic Studies, Wiley Blackwell, vol. 54(1), pages 105-45, January.
- Robert W. Staiger & Frank A. Wolak, 1992. "Collusive Pricing with Capacity Constraints in the Presence of Demand Uncertainty," RAND Journal of Economics, The RAND Corporation, vol. 23(2), pages 203-220, Summer.
- Davis, Douglas, 2009.
"Pure numbers effects, market power, and tacit collusion in posted offer markets,"
Journal of Economic Behavior & Organization,
Elsevier, vol. 72(1), pages 475-488, October.
- Douglas D. Davis, 2006. "Pure Numbers Effects, Market Power, and Tacit Collusion in Posted Offer Markets," Working Papers 0603, VCU School of Business, Department of Economics, revised Jan 2009.
- Andrey Shastitko & Svetlana Avdasheva, 2011. "Introduction of Leniency Programs for Cartel Participants: The Russian Case," Antitrust Chronicle, Competition Policy International, vol. 8.
- Marshall, Robert C. & Marx, Leslie M., 2012. "The Economics of Collusion: Cartels and Bidding Rings," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262017326, December.
- Sergio Ermacora & Senada Smajić, 2009. "The Make-or-Buy Decision in the Croatian Shipbuilding Industry: A Transaction Cost Economics Approach," South East European Journal of Economics and Business, De Gruyter Open, vol. 4(1), pages 81-105, April.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shamil Abdulaev) or (Victoria Elkina).
If references are entirely missing, you can add them using this form.