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Market Power and Collusion in the Ocean Shipping Industry: Is a Bigger Cartel a Better Cartel?

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  • Clyde, Paul S
  • Reitzes, James D

Abstract

The regulatory structure of the ocean shipping industry allows carriers to enter into joint pricing agreements (conference agreements) that are free from antitrust scrutiny and requires freight rates to be published and policed by a government agency. The authors test whether this regulatory structure leads to the exercise of market power and identify whether that market power resides with conferences themselves or requires the participation of carriers outside the conference. The results suggest that liner conferences are not particularly effective cartels although some market power may exist in ocean shipping. Market concentration may be a contributing factor to this market power. Copyright 1998 by Oxford University Press.

Suggested Citation

  • Clyde, Paul S & Reitzes, James D, 1998. "Market Power and Collusion in the Ocean Shipping Industry: Is a Bigger Cartel a Better Cartel?," Economic Inquiry, Western Economic Association International, vol. 36(2), pages 292-304, April.
  • Handle: RePEc:oup:ecinqu:v:36:y:1998:i:2:p:292-304
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    Cited by:

    1. Martin, Stephen, 2006. "Competition policy, collusion, and tacit collusion," International Journal of Industrial Organization, Elsevier, vol. 24(6), pages 1299-1332, November.
    2. Goh, Shao Hung & Chan, Yuxian, 2016. "Operational shadow pricing in back haul container shipping," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 92(C), pages 3-15.
    3. Fung, Michael K. & Cheng, Leonard K. & Qiu, Larry D., 2003. "The impact of terminal handling charges on overall shipping charges: an empirical study," Transportation Research Part A: Policy and Practice, Elsevier, vol. 37(8), pages 703-716, October.
    4. Michael Fung, 2014. "Ocean Carriers’ Collusion Under Antitrust Immunity: Evidence of Asymmetric Pass-Through," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 45(1), pages 59-77, August.
    5. Hayden G. Stewart & Fred S. Inaba, 2003. "Ocean liner shipping: Organizational and contractual response by agribusiness shippers to regulatory change," Agribusiness, John Wiley & Sons, Ltd., vol. 19(4), pages 459-472.
    6. Okereke, Chukwumerije & McDaniels, Devin, 2012. "To what extent are EU steel companies susceptible to competitive loss due to climate policy?," Energy Policy, Elsevier, vol. 46(C), pages 203-215.
    7. Chen, Gang & Rytter, Niels G.M. & Jiang, Liping & Nielsen, Peter & Jensen, Lars, 2017. "Pre-announcements of price increase intentions in liner shipping spot markets," Transportation Research Part A: Policy and Practice, Elsevier, vol. 95(C), pages 109-125.
    8. Cullinane, Kevin, 2004. "7. The Container Shipping Industry And The Impact Of China'S Accession To The Wto," Research in Transportation Economics, Elsevier, vol. 12(1), pages 221-245, January.
    9. James Reitzes & Kelli Sheran, 2002. "Rolling Seas in Liner Shipping," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 20(1), pages 51-59, February.
    10. Stephen Martin, 2012. "Market Structure and Market Performance," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 40(2), pages 87-108, March.

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