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Competition policy and cartel size

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  • Bos A.M.
  • Harrington Jr. J.E.

    (GSBE)

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    Abstract

    This paper examines endogenous cartel formation in the presence of a competition authority. Competition policy makes the most inclusive stable cartels less inclusive. In particular, small firms that might have been cartel members in the absence of a competition authority are no longer members. Regarding the least inclusive stable cartels, competition policy can either increase or decrease their inclusiveness. Highly inelastic market demand is sufficient for the presence of a competition authority to cause the least inclusive stable cartels to increase in size.

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    File URL: http://pub.maastrichtuniversity.nl/20cecf39-d575-4a70-8808-e24e189fb8f1
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    Bibliographic Info

    Paper provided by Maastricht University, Graduate School of Business and Economics (GSBE) in its series Research Memorandum with number 027.

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    Date of creation: 2013
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    Handle: RePEc:unm:umagsb:2013027

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