Antitrust Agencies And Hard-Core Cartels: A Game Theoretic Perspective
This article studies the strategic interactions between cartelists and the antitrust agency in two theoretical game settings. In the simultaneous game, the numerical results show that it becomes harder for the firms to sustain collusion, but easier for the antitrust agency to detect collusion as the damage multiplier and the effectiveness of leniency program increase. In addition, inelastic demand can also lead to higher detection probability. Therefore, the cartel's collusive price can be reduced when the antitrust agency increases the damage multiplier, and/or implements the leniency program more efficiently. In the sequential game where the cartel decides its collusive price in the first stage, the equilibrium collusive price is higher, and antitrust agency's budget allocation on cartel detection is smaller than in the simultaneous game. And the probability of detection is 5% higher in the sequential game.
Volume (Year): 1 (2011)
Issue (Month): 17 (November)
|Contact details of provider:|| Postal: |
Phone: 004 0251 411317
Fax: 004 0251 411317
Web page: http://feaa.ucv.ro/
More information through EDIRC
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.:
- Kyle Bagwell & Robert W. Staiger, 1995.
"Collusion Over the Business Cycle,"
1118, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- John M. Connor, 2004.
"Global Antitrust Prosecutions of Modern International Cartels,"
Journal of Industry, Competition and Trade,
Springer, vol. 4(3), pages 239-267, 09.
- John M. Connor, 2004. "Global Antitrust Prosecutions Of Modern International Cartels," Working Papers 04-15, Purdue University, College of Agriculture, Department of Agricultural Economics.
- B. Douglas Bernheim & Michael D. Whinston, 1990. "Multimarket Contact and Collusive Behavior," RAND Journal of Economics, The RAND Corporation, vol. 21(1), pages 1-26, Spring.
When requesting a correction, please mention this item's handle: RePEc:aio:rteyej:v:1:y:2011:i:17:p:150-161. 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: (Ionascu Costel)
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.