IDEAS home Printed from https://ideas.repec.org/a/bla/jemstr/v6y1997i4p679-724.html
   My bibliography  Save this article

Entry and Predation: British Shipping Cartels 1879-1929

Author

Listed:
  • Fiona Scott Morton

Abstract

I examine the outcomes of cases of entry by merchant shipping lines into established markets around the turn of the century. These established markets are completely dominated by an incumbent cartel composed of several member shipping lines. The cartel makes the decision whether or not to begin a price war against the entrant; some entrants are formally admitted to the cartel without any conflict. I use characteristics of the entrant to predict whether or not the entrant will encounter a price war conditional on entering. I find that weaker entrants are fought, where "weaker" means having fewer financial resources, less experience, smaller size, or poor trade conditions. The empirical results provide most support for the long-purse theory of predation. Due to the small number of observations available, 47, I discuss qualitative evidence (such as predatory intent expressed in correspondence between cartel members) that supports the empirical results. The results are also found to be robust to misclassification of the dependent variable, which is a particular concern when dealing with historical data. Copyright (c) 1997 Massachusetts Institute of Technology.

Suggested Citation

  • Fiona Scott Morton, 1997. "Entry and Predation: British Shipping Cartels 1879-1929," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 6(4), pages 679-724, December.
  • Handle: RePEc:bla:jemstr:v:6:y:1997:i:4:p:679-724
    as

    Download full text from publisher

    File URL: http://www.blackwell-synergy.com/servlet/useragent?func=synergy&synergyAction=showTOC&journalCode=jems&volume=6&issue=4&year=1997&part=null
    File Function: link to full text
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

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


    Cited by:

    1. Bernard, Darren, 2016. "Is the risk of product market predation a cost of disclosure?," Journal of Accounting and Economics, Elsevier, vol. 62(2), pages 305-325.
    2. Argenton, Cédric & Willems, Bert, 2015. "Exclusion through speculation," International Journal of Industrial Organization, Elsevier, vol. 39(C), pages 1-9.
    3. John M. Connor, 2003. "Private International Cartels: Effectiveness, Welfare, and Anticartel Enforcement," Working Papers 03-12, Purdue University, College of Agriculture, Department of Agricultural Economics.
    4. Kai Hüschelrath & Tobias Veith, 2016. "Cartelization, Cartel Breakdown, and Price Behavior: Evidence from the German Cement Industry," Journal of Industry, Competition and Trade, Springer, vol. 16(1), pages 81-100, March.
    5. Argenton, C., 2010. "Predation Under Perfect Information," Discussion Paper 2010-26, Tilburg University, Center for Economic Research.
    6. Luigi Pascali, 2017. "The Wind of Change: Maritime Technology, Trade, and Economic Development," American Economic Review, American Economic Association, vol. 107(9), pages 2821-2854, September.
    7. Stephen Martin, 2015. "Areeda–Turner and the Treatment of Exclusionary Pricing under U.S. Antitrust and EU Competition Policy," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 46(3), pages 229-252, May.
    8. repec:elg:eechap:16609_15 is not listed on IDEAS
    9. Fabien Bertho, 2012. "The Impact of Liner Shipping Trade and Competition Regulations on The Market Structure, Maritime Transport Costs and Seaborne Trade Flows: Regulations on The Market Structure, Maritime Transport Costs," Sciences Po publications info:hdl:2441/7o52iohb7k6, Sciences Po.
    10. Robert Clark & Decio Coviello & Jean-Francois Gauthier & Art Shneyerov, 2018. "Bid Rigging And Entry Deterrence In Public Procurement: Evidence From An Investigation Into Collusion And Corruption In Quebec," Working Paper 1401, Economics Department, Queen's University.
    11. Giocoli, Nicola, 2012. "British economists on competition policy (1890-1920)," MPRA Paper 39245, University Library of Munich, Germany.
    12. Stephen Martin, 2018. "Behavioral antitrust," Chapters,in: Handbook of Behavioral Industrial Organization, chapter 15, pages 404-454 Edward Elgar Publishing.
    13. Hüschelrath, Kai & Veith, Tobias, 2011. "The impact of cartelization on pricing dynamics: Evidence from the German cement industry," ZEW Discussion Papers 11-067, ZEW - Leibniz Centre for European Economic Research.
    14. repec:spo:wpecon:info:hdl:2441/7o52iohb7k6srk09mit038srm is not listed on IDEAS

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jemstr:v:6:y:1997:i:4:p:679-724. 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: (Wiley Content Delivery). General contact details of provider: http://www.kellogg.northwestern.edu/research/journals/JEMS/ .

    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.

    We have no references for this item. You can help adding them by using 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.