IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this article

Price Fixing Hits Home: An Empirical Study of US Price-Fixing Conspiracies

Listed author(s):
  • Margaret C. Levenstein

    ()

    (University of Michigan Ross School of Business)

  • Valerie Y. Suslow

    (Johns Hopkins University Carey School of Business)

Abstract This paper analyzes a sample of Section 1, Sherman Act price fixing cases brought by the US Department of Justice between 1961 and 2013. Over 500 cartels were prosecuted during this period. The determinants of cartel formation and cartel breakup are estimated, including analysis of the impact of the discount rate, business cycles, and antitrust policy. We find that cartels are more likely to break up during periods of high real interest rates, presumably because higher interest rates are associated with greater impatience. The adoption of a stronger amnesty policy has no significant impact on cartel breakup over this period, although the results suggest some association with lower cartel formation rates.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://link.springer.com/10.1007/s11151-016-9520-5
File Function: Abstract
Download Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Springer & The Industrial Organization Society in its journal Review of Industrial Organization.

Volume (Year): 48 (2016)
Issue (Month): 4 (June)
Pages: 361-379

as
in new window

Handle: RePEc:kap:revind:v:48:y:2016:i:4:d:10.1007_s11151-016-9520-5
DOI: 10.1007/s11151-016-9520-5
Contact details of provider: Web page: http://www.springer.com

Web page: http://www.ios.neu.edu/index.htm

More information through EDIRC

Order Information: Web: http://www.springer.com/economics/industrial+organization/journal/11151/PS2

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.:

as
in new window


  1. Pedro Dal Bó, 2005. "Cooperation under the Shadow of the Future: Experimental Evidence from Infinitely Repeated Games," American Economic Review, American Economic Association, vol. 95(5), pages 1591-1604, December.
  2. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, December.
  3. Lisa Bruttel, 2009. "The critical discount factor as a measure for cartel stability?," Journal of Economics, Springer, vol. 96(2), pages 113-136, March.
  4. Chaim Fershtman & Ariel Pakes, 2000. "A Dynamic Oligopoly with Collusion and Price Wars," RAND Journal of Economics, The RAND Corporation, vol. 31(2), pages 207-236, Summer.
  5. Claude d'Aspremont & Alexis Jacquemin & Jean Jaskold Gabszewicz & John A. Weymark, 1983. "On the Stability of Collusive Price Leadership," Canadian Journal of Economics, Canadian Economics Association, vol. 16(1), pages 17-25, February.
  6. Bryant, Peter G & Eckard, E Woodrow, Jr, 1991. "Price Fixing: The Probability of Getting Caught," The Review of Economics and Statistics, MIT Press, vol. 73(3), pages 531-536, August.
  7. Green, Edward J & Porter, Robert H, 1984. "Noncooperative Collusion under Imperfect Price Information," Econometrica, Econometric Society, vol. 52(1), pages 87-100, January.
  8. Aubert, Cecile & Rey, Patrick & Kovacic, William E., 2006. "The impact of leniency and whistle-blowing programs on cartels," International Journal of Industrial Organization, Elsevier, vol. 24(6), pages 1241-1266, November.
  9. Robert Feinberg & Christopher Snyder, 2002. "Collusion with secret price cuts: an experimental investigation," Economics Bulletin, AccessEcon, vol. 3(6), pages 1-11.
  10. Harrington, Joseph Jr., 1989. "Collusion among asymmetric firms: The case of different discount factors," International Journal of Industrial Organization, Elsevier, vol. 7(2), pages 289-307, June.
  11. Hay, George A & Kelley, Daniel, 1974. "An Empirical Survey of Price Fixing Conspiracies," Journal of Law and Economics, University of Chicago Press, vol. 17(1), pages 13-38, April.
  12. Iwan Bos & Joseph E. Harrington, Jr, 2010. "Endogenous cartel formation with heterogeneous firms," RAND Journal of Economics, RAND Corporation, vol. 41(1), pages 92-117.
  13. Hodrick, Robert J & Prescott, Edward C, 1997. "Postwar U.S. Business Cycles: An Empirical Investigation," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 29(1), pages 1-16, February.
  14. Alexander, Barbara, 1994. "The Impact of the National Industrial Recovery Act on Cartel Formation and Maintenance Costs," The Review of Economics and Statistics, MIT Press, vol. 76(2), pages 245-254, May.
  15. Filson, Darren, et al, 2001. "Market Power and Cartel Formation: Theory and an Empirical Test," Journal of Law and Economics, University of Chicago Press, vol. 44(2), pages 465-480, October.
  16. Baker, Jonathan B, 1989. "Identifying Cartel Policing under Uncertainty: The U.S. Steel Industry, 1933-1939," Journal of Law and Economics, University of Chicago Press, vol. 32(2), pages 47-76, October.
  17. repec:dau:papers:123456789/13637 is not listed on IDEAS
  18. Matthew B. Krepps, 1997. "Another Look At The Impact Of The National Industrial Recovery Act On Cartel Formation And Maintenance Costs," The Review of Economics and Statistics, MIT Press, vol. 79(1), pages 151-154, February.
  19. Pedro Dal Bo & Guillaume R. Frochette, 2011. "The Evolution of Cooperation in Infinitely Repeated Games: Experimental Evidence," American Economic Review, American Economic Association, vol. 101(1), pages 411-429, February.
  20. Nathan H. Miller, 2009. "Strategic Leniency and Cartel Enforcement," American Economic Review, American Economic Association, vol. 99(3), pages 750-768, June.
  21. Margaret C. Levenstein & Valerie Y. Suslow, 2011. "Breaking Up Is Hard to Do: Determinants of Cartel Duration," Journal of Law and Economics, University of Chicago Press, vol. 54(2), pages 455-492.
  22. Posner, Richard A, 1970. "A Statistical Study of Antitrust Enforcement," Journal of Law and Economics, University of Chicago Press, vol. 13(2), pages 365-419, October.
  23. Feinberg, Robert M & Husted, Thomas A, 1993. "An Experimental Test of Discount-Rate Effects on Collusive Behaviour in Duopoly Markets," Journal of Industrial Economics, Wiley Blackwell, vol. 41(2), pages 153-160, June.
  24. Sabater-Grande, Gerardo & Georgantzis, Nikolaos, 2002. "Accounting for risk aversion in repeated prisoners' dilemma games: an experimental test," Journal of Economic Behavior & Organization, Elsevier, vol. 48(1), pages 37-50, May.
  25. Bradburd, Ralph M & Over, A Mead, Jr, 1982. "Organizational Costs, "Sticky Equilibria," and Critical Levels of Concentration," The Review of Economics and Statistics, MIT Press, vol. 64(1), pages 50-58, February.
  26. Joseph Gallo & Kenneth Dau-Schmidt & Joseph Craycraft & Charles Parker, 2000. "Department of Justice Antitrust Enforcement, 1955—1997: An Empirical Study," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 17(1), pages 75-133, August.
  27. Joseph E. Harrington & Myong-Hun Chang, 2009. "Modeling the Birth and Death of Cartels with an Application to Evaluating Competition Policy," Journal of the European Economic Association, MIT Press, vol. 7(6), pages 1400-1435, December.
  28. Schmitt, Nicolas & Weder, Rolf, 1998. "Sunk costs and cartel formation: Theory and application to the dyestuff industry," Journal of Economic Behavior & Organization, Elsevier, vol. 36(2), pages 197-220, August.
  29. Rotemberg, Julio J & Saloner, Garth, 1986. "A Supergame-Theoretic Model of Price Wars during Booms," American Economic Review, American Economic Association, vol. 76(3), pages 390-407, June.
  30. Morten O. Ravn & Harald Uhlig, 2002. "On adjusting the Hodrick-Prescott filter for the frequency of observations," The Review of Economics and Statistics, MIT Press, vol. 84(2), pages 371-375.
  31. Holt, Charles A, 1985. "An Experimental Test of the Consistent-Conjectures Hypothesis," American Economic Review, American Economic Association, vol. 75(3), pages 314-325, June.
  32. repec:ebl:ecbull:v:3:y:2002:i:6:p:1-11 is not listed on IDEAS
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:kap:revind:v:48:y:2016:i:4:d:10.1007_s11151-016-9520-5. 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: (Sonal Shukla)

or (Rebekah McClure)

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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.