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The Impact of Collusion on Price Behavior: Empirical Results from Two Recent Cases

  • Bolotova, Yuliya
  • Connor, John M.
  • Miller, Douglas J.

We used extensions of traditional ARCH and GARCH models to examine the difference in the behavior of the first two moments of the price distribution during collusion and the absence of it using prices from two recently discovered conspiracies, citric acid and lysine. According to our results, the citric acid conspiracy increased prices by 9 cents per pound relative to pre-cartel and post-cartel periods. The lysine conspiracy managed to raise prices by 25 cents per pound. In addition, the variance of prices during the lysine conspiracy was lower than the variance of prices during pre-cartel and post-cartel periods as we expected. In contrast, the variance of prices during the citric acid conspiracy was higher relative to more competitive periods.

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File URL: http://purl.umn.edu/19164
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Paper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2005 Annual meeting, July 24-27, Providence, RI with number 19164.

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Date of creation: 2005
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Handle: RePEc:ags:aaea05:19164
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