Tacit Collusion under Imperfect Monitoring in the Canadian Manufacturing Industry: An Empirical Study
The paper undertakes a cross-sectoral analysis of a salient empirical implication of the model of tacit collusion advanced by Abreu et al (1986). Specifically, the prevalence of a first order Markovian process for alternating between price wars and collusive periods is assessed by means of non-parametric tests. The analysis focuses on 30 different industries in Canada. The evidence provides weak support for optimal collusion in one industry, which is consistent with the idea that such collusive arrangements are unusual.
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- Knittel, Christopher R. & Lepore, Jason J., 2010.
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International Journal of Industrial Organization,
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- Leola Ross, 1997. "When Will an Airline Stand Its Ground? An Analysis of Fare Wars," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 4(2), pages 109-127.
- Lee, Lung-Fei & Porter, Robert H, 1984. "Switching Regression Models with Imperfect Sample Separation Information-With an Application on Cartel Stability," Econometrica, Econometric Society, vol. 52(2), pages 391-418, March. Full references (including those not matched with items on IDEAS)
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