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Do antitrust agencies facilitate meetings in smoke-filled rooms?

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  • Iwan Bos
  • Ronald Peeters
  • Erik Pot

Abstract

This article identifies a potential adverse effect of antitrust enforcement. We show that if tacit collusion is not sustainable, firms are able and willing to collude explicitly when demand is viscous, the expected antitrust penalty is limited and antitrust agencies are sufficiently effective in catching cartels.

Suggested Citation

  • Iwan Bos & Ronald Peeters & Erik Pot, 2013. "Do antitrust agencies facilitate meetings in smoke-filled rooms?," Applied Economics Letters, Taylor & Francis Journals, vol. 20(6), pages 611-614, April.
  • Handle: RePEc:taf:apeclt:v:20:y:2013:i:6:p:611-614 DOI: 10.1080/13504851.2012.725925
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    References listed on IDEAS

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    1. Motta,Massimo, 2004. "Competition Policy," Cambridge Books, Cambridge University Press, number 9780521016919, December.
    2. Joseph E. Harrington & Andrzej Skrzypacz, 2011. "Private Monitoring and Communication in Cartels: Explaining Recent Collusive Practices," American Economic Review, American Economic Association, pages 2425-2449.
    3. Martin, Stephen, 2006. "Competition policy, collusion, and tacit collusion," International Journal of Industrial Organization, Elsevier, vol. 24(6), pages 1299-1332, November.
    4. Ola Andersson & Erik Wengström, 2007. "Do Antitrust Laws Facilitate Collusion? Experimental Evidence on Costly Communication in Duopolies," Scandinavian Journal of Economics, Wiley Blackwell, vol. 109(2), pages 321-339, June.
    5. Paul Klemperer, 1995. "Competition when Consumers have Switching Costs: An Overview with Applications to Industrial Organization, Macroeconomics, and International Trade," Review of Economic Studies, Oxford University Press, vol. 62(4), pages 515-539.
    6. McCutcheon, Barbara, 1997. "Do Meetings in Smoke-Filled Rooms Facilitate Collusion?," Journal of Political Economy, University of Chicago Press, vol. 105(2), pages 330-350, April.
    7. Stephen Davies & Matthew Olczak, 2008. "Tacit versus Overt Collusion Firm Asymmetries and Numbers: What’s the Evidence?," Working Papers 08-32, Centre for Competition Policy, University of East Anglia.
    8. Joseph E. Harrington & Andrzej Skrzypacz, 2011. "Private Monitoring and Communication in Cartels: Explaining Recent Collusive Practices," American Economic Review, American Economic Association, pages 2425-2449.
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    1. repec:bla:ijethy:v:13:y:2017:i:4:p:387-400 is not listed on IDEAS
    2. Iwan Bos & Ronald Peeters & Erik Pot, 2017. "Competition versus collusion: The impact of consumer inertia," International Journal of Economic Theory, The International Society for Economic Theory, pages 387-400.

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