Advanced Search
MyIDEAS: Login to save this paper or follow this series

Private Monitoring and Communication in Cartels: Explaining Recent Collusive Practices

Contents:

Author Info

  • Joseph E. Harrington, Jr.
  • Andrzej Skrzypacz

Abstract

Motivated by recent cartel practices, a stable collusive agreement is characterized when firms' prices and quantities are private information. Conditions are derived whereby an equilibrium exists in which firms truthfully report their sales and then make transfers within the cartel based on these reports. The properties of this equilibrium fit well with the cartel agreements used in a number of markets including citric acid, lysine, and vitamins.

Download Info

If 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.
File URL: http://econ.jhu.edu/wp-content/uploads/pdf/papers/wp555.pdf
Download Restriction: no

Bibliographic Info

Paper provided by The Johns Hopkins University,Department of Economics in its series Economics Working Paper Archive with number 555.

as in new window
Length:
Date of creation: Aug 2009
Date of revision:
Handle: RePEc:jhu:papers:555

Contact details of provider:
Postal: 3400 North Charles Street Baltimore, MD 21218
Phone: 410-516-7601
Fax: 410-516-7600
Web page: http://www.econ.jhu.edu
More information through EDIRC

Related research

Keywords:

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
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.:
as in new window
  1. Johannes Horner & Wojciech Olszewski, 2005. "The Folk Theorem for Games with Private, Almost-Perfect Monitoring," NajEcon Working Paper Reviews 172782000000000006, www.najecon.org.
  2. William Fuchs, 2007. "Contracting with Repeated Moral Hazard and Private Evaluations," American Economic Review, American Economic Association, vol. 97(4), pages 1432-1448, September.
  3. Olivier Compte, 1998. "Communication in Repeated Games with Imperfect Private Monitoring," Econometrica, Econometric Society, Econometric Society, vol. 66(3), pages 597-626, May.
  4. Zheng, Bingyong, 2008. "Approximate efficiency in repeated games with correlated private signals," Games and Economic Behavior, Elsevier, vol. 63(1), pages 406-416, May.
  5. Abreu, Dilip & Milgrom, Paul & Pearce, David, 1991. "Information and Timing in Repeated Partnerships," Econometrica, Econometric Society, Econometric Society, vol. 59(6), pages 1713-33, November.
  6. Obara, Ichiro, 2009. "Folk theorem with communication," Journal of Economic Theory, Elsevier, vol. 144(1), pages 120-134, January.
  7. Green, Edward J & Porter, Robert H, 1984. "Noncooperative Collusion under Imperfect Price Information," Econometrica, Econometric Society, Econometric Society, vol. 52(1), pages 87-100, January.
  8. Mailath, George J. & Samuelson, Larry, 2006. "Repeated Games and Reputations: Long-Run Relationships," OUP Catalogue, Oxford University Press, Oxford University Press, number 9780195300796, October.
  9. Athey, Susan & Bagwell, Kyle, 2001. "Optimal Collusion with Private Information," RAND Journal of Economics, The RAND Corporation, vol. 32(3), pages 428-65, Autumn.
  10. Aoyagi, Masaki, 2002. "Collusion in Dynamic Bertrand Oligopoly with Correlated Private Signals and Communication," Journal of Economic Theory, Elsevier, vol. 102(1), pages 229-248, January.
  11. Michihiro Kandori, 2001. "Introduction to Repeated Games with Private Monitoring," CIRJE F-Series, CIRJE, Faculty of Economics, University of Tokyo CIRJE-F-114, CIRJE, Faculty of Economics, University of Tokyo.
  12. Michihiro Kandori & Hitoshi Matsushima, 1998. "Private Observation, Communication and Collusion," Econometrica, Econometric Society, Econometric Society, vol. 66(3), pages 627-652, May.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Gärtner, D.L. & Zhou, J., 2012. "Delays in Leniency Application: Is There Really a Race to the Enforcer’s Door?," Discussion Paper, Tilburg University, Tilburg Law and Economic Center 2012-044, Tilburg University, Tilburg Law and Economic Center.
  2. Frieder Mokinski & Nikolas Wölfing, 2014. "The effect of regulatory scrutiny: Asymmetric cost pass-through in power wholesale and its end," Journal of Regulatory Economics, Springer, Springer, vol. 45(2), pages 175-193, April.
  3. Yuichi Yamamoto, 2012. "Characterizing Belief-Free Review-Strategy Equilibrium Payoffs under ConditionalIndependence," PIER Working Paper Archive 12-005, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
  4. Yuichi Yamamoto, 2012. "Individual Learning and Cooperation in Noisy Repeated Games," PIER Working Paper Archive 12-044, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
  5. Harrington, Joseph E. & Zhao, Wei, 2012. "Signaling and tacit collusion in an infinitely repeated Prisoners’ Dilemma," Mathematical Social Sciences, Elsevier, Elsevier, vol. 64(3), pages 277-289.
  6. Ricardo Andrés Guzmán & Rodrigo Harrison & Nureya Abarca & Mauricio G. Villena, 2013. "Reciprocity and Trust: Personality Psychology meets Behavioral Economics," Documentos de Trabajo, Instituto de Economia. Pontificia Universidad Católica de Chile. 439, Instituto de Economia. Pontificia Universidad Católica de Chile..
  7. Yamamoto, Yuichi, 2012. "Characterizing belief-free review-strategy equilibrium payoffs under conditional independence," Journal of Economic Theory, Elsevier, vol. 147(5), pages 1998-2027.
  8. Fonseca, Miguel A. & Normann, Hans-Theo, 2012. "Explicit vs. tacit collusion—The impact of communication in oligopoly experiments," European Economic Review, Elsevier, vol. 56(8), pages 1759-1772.
  9. Joseph E. Harrington, Jr. & Wei Zhao, 2010. "Signaling and Tacit Collusion in an Infinitely Repeated Prisoners' Dilemma," Economics Working Paper Archive, The Johns Hopkins University,Department of Economics 559, The Johns Hopkins University,Department of Economics.
  10. Joseph E. Harrington, Jr. & Juan-Pablo Montero, 2013. "Cartel Sales Dynamics when Monitoring for Compliance is More Frequent than Punishment for Non-Compliance," Documentos de Trabajo, Instituto de Economia. Pontificia Universidad Católica de Chile. 446, Instituto de Economia. Pontificia Universidad Católica de Chile..
  11. Tim Reuter, 2013. "Endogenous Cartel Organization and Antitrust Fine Discrimination," Working Paper Series of the Department of Economics, University of Konstanz 2013-09, Department of Economics, University of Konstanz.
  12. Catherine Roux & Christian Thöni, 2013. "Collusion Among Many Firms: The Disciplinary Power of Targeted Punishment," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP), Université de Lausanne, Faculté des HEC, DEEP 13.02, Université de Lausanne, Faculté des HEC, DEEP.
  13. Yuichi Yamamoto, 2013. "Individual Learning and Cooperation in Noisy Repeated Games," PIER Working Paper Archive 13-038, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
  14. Salvatore Piccolo & Giancarlo Spagnolo, 2014. "Debt, Managers and Cartels," CSEF Working Papers, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy 365, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:jhu:papers:555. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (None) The email address of this maintainer does not seem to be valid anymore. Please ask None to update the entry or send us the correct address.

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.