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Cartels Uncovered

Author

Listed:
  • Hyytinen, Ari

    (University of Jyväskylä)

  • Steen, Frode

    () (Dept. of Economics, Norwegian School of Economics and Business Administration)

  • Toivanen, Otto

    (HECER & CEPR)

Abstract

How many cartels are there? The answer is important in assessing the efficiency of competition policy. We present a Hidden Markov Model that answers the question, taking into account that often we do not know whether a cartel exists in an industry or not. Our model identifies key policy parameters from data generated under different competition policy regimes and may be used with time-series or panel data. We take the model to data from a period of legal cartels - Finnish manufacturing industries 1951 - 1990. Our estimates suggest that by the end of the period, almost all industries were cartelized.

Suggested Citation

  • Hyytinen, Ari & Steen, Frode & Toivanen, Otto, 2010. "Cartels Uncovered," Discussion Paper Series in Economics 10/2010, Norwegian School of Economics, Department of Economics.
  • Handle: RePEc:hhs:nhheco:2010_010
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Lommerud, Kjell Erik & Meland, Frode & Straume, Odd Rune, 2011. "Mergers and capital flight in unionised oligopolies: Is there scope for a "national champion" policy?," International Review of Economics & Finance, Elsevier, vol. 20(2), pages 325-341, April.
    2. Fink, Nikolaus & Frübing, Stefan, 2015. "Legal and illegal cartels in the European cement industry," ZEW Discussion Papers 15-066, ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung GmbH Mannheim / Leibniz Centre for European Economic Research.

    More about this item

    Keywords

    Antitrust; cartel; competition; detection; Hidden Markov models; illegal; legal; leniency; policy; registry.;

    JEL classification:

    • L00 - Industrial Organization - - General - - - General
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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