Cartel in the Indian cement industry: An attempt to identify it
AbstractThis article is devoted to the problem of the detection of overt or tacit collusion equilibrium in the context of the choice of the appropriate econometric method, a choice that is determined by the amount of information that the observer possesses. The author addresses this problem in two steps. First, to provide a theoretical background, he uses a collusion marker based on structural disturbances in a price process'; variance. Then, he applies a Markov switching model with switching in variance regimes. The author considers this method adequate and coherent with the problem structure and the research objective, and useful for assessing the functionality of the collusion marker he uses. He uses the model to examine the Indian cement industry in the period 1994-2009 and finds some objective indications of collusion and competition phases. These phases are confirmed by certain historical facts as well as by numerous research articles. --
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Bibliographic InfoPaper provided by Kiel Institute for the World Economy in its series Economics Discussion Papers with number 2012-18.
Date of creation: 2012
Date of revision:
Explicit and tacit collusion; collusive equilibrium; cartel detection; cement industry; price variance; Markov switching model;
Find related papers by JEL classification:
- C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models &bull Diffusion Processes
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L61 - Industrial Organization - - Industry Studies: Manufacturing - - - Metals and Metal Products; Cement; Glass; Ceramics
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-04-10 (All new papers)
- NEP-COM-2012-04-10 (Industrial Competition)
- NEP-CWA-2012-04-10 (Central & Western Asia)
- NEP-HME-2012-04-10 (Heterodox Microeconomics)
- NEP-IND-2012-04-10 (Industrial Organization)
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