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Cartel agreement reached, but price not raised

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  • Koki Arai

    (Kyoritsu Women’s University)

Abstract

This study examines the impact of a nationwide shutter price cartel mentioned in the Japan Fair Trade Commission’s June 2010 press release using producers’ shipment data obtained from publicly available information statistics. The economics literature has referred to cartel overcharges in excess of 20%. However, in reality, price hikes by cartels should be very difficult to implement under economic deflation. In our case, the realized price hike was only 4% against the agreed 10% hike. The reasons for this limited hike may be as follows: (i) seasonal factors, that is, bad months for fixing prices; (ii) excessively high price elasticity for price fixing; and (iii) the effect of cartels on inappropriate management perspectives.

Suggested Citation

  • Koki Arai, 2024. "Cartel agreement reached, but price not raised," International Journal of Economic Policy Studies, Springer, vol. 18(1), pages 259-282, February.
    • Handle: RePEc:spr:ijoeps:v:18:y:2024:i:1:d:10.1007_s42495-023-00127-7
    DOI: 10.1007/s42495-023-00127-7
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    More about this item

    Keywords

    Cartel overcharge; Japan; Price cartel; Shutter;
    All these keywords.

    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • L64 - Industrial Organization - - Industry Studies: Manufacturing - - - Other Machinery; Business Equipment; Armaments

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