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The impact of cartel dissolution on prices: Evidence from the air cargo cartel

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  • Turner, Douglas C.

Abstract

I analyze pricing behavior before and after the detection of an air cargo cartel using a novel, hand-collected dataset. I find that prices did not decline after the cartel's detection. Additionally, pricing patterns are consistent with post-cartel tacit collusion. My findings suggest that airlines' cartel activity (specifically, the development of a methodology for determining the collusive price) laid a foundation for future tacit collusion. As a result, airlines profited from cartel activity, and shippers paid elevated prices, long after the cartel's dissolution.

Suggested Citation

  • Turner, Douglas C., 2024. "The impact of cartel dissolution on prices: Evidence from the air cargo cartel," International Journal of Industrial Organization, Elsevier, vol. 97(C).
    • Handle: RePEc:eee:indorg:v:97:y:2024:i:c:s016771872400064x
    DOI: 10.1016/j.ijindorg.2024.103109
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    JEL classification:

    • L4 - Industrial Organization - - Antitrust Issues and Policies
    • K2 - Law and Economics - - Regulation and Business Law
    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory

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