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Hidden collusion by decentralization: firm organization and antitrust policy

Author

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  • Emilie Dargaud

    (GATE Lyon Saint-Étienne - Groupe d'Analyse et de Théorie Economique Lyon - Saint-Etienne - ENS de Lyon - École normale supérieure de Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UJM - Université Jean Monnet - Saint-Étienne - CNRS - Centre National de la Recherche Scientifique)

  • Armel Jacques

    (CEMOI - Centre d'Économie et de Management de l'Océan Indien - UR - Université de La Réunion)

Abstract

This paper develops a theory of the centralization of firms engaged in multi-market collusive agreements. A centralized organization (called the unitary or U-form) allows price coordination across several markets, whereas with decentralized (the multidivisional or M-form) firms the probability that the antitrust authority will find evidence of collusion on one market while investigating the other is lower. We show that the firm's choice of internal structure depends to a large extent on product substitutability and the instruments used by the antitrust authority.

Suggested Citation

  • Emilie Dargaud & Armel Jacques, 2015. "Hidden collusion by decentralization: firm organization and antitrust policy," Post-Print hal-01450833, HAL.
    • Handle: RePEc:hal:journl:hal-01450833
    DOI: 10.1007/s00712-013-0386-9
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    Cited by:

    1. Emilie Dargaud & Armel Jacques, 2015. "Hidden collusion by decentralization: firm organization and antitrust policy," Journal of Economics, Springer, vol. 114(2), pages 153-176, March.
    2. Emilie Dargaud & Armel Jacques, 2020. "Slowdown antitrust investigations by decentralization," Working Papers halshs-02613352, HAL.
    3. Luca Lambertini & Giuseppe Pignataro, 2019. "On the social (sub)optimality of divisionalization under product differentiation," Journal of Economics, Springer, vol. 128(3), pages 225-238, December.
    4. Emilie Dargaud & Armel Jacques, 2015. "Endogenous firms’ organization, internal audit and leniency programs," Working Papers 1524, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
    5. Tsuyoshi Toshimitsu, 2017. "The optimal choice of internal decision-making structures in a network industry," Discussion Paper Series 166, School of Economics, Kwansei Gakuin University, revised Sep 2017.

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    More about this item

    Keywords

    R & D/Technology Policy; Antitrust policy; Collusion; Economics general; Economic Theory; International Economics; M-form; Microeconomics; Organizational design; U-form;
    All these keywords.

    JEL classification:

    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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