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American Economic Journal: Microeconomics: Vol. 5 No. 3 (August 2013)

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Collusion with Asymmetric Retailers: Evidence from a Gasoline Price-Fixing Case

Article Citation

Clark, Robert, and Jean-François Houde. 2013. "Collusion with Asymmetric Retailers: Evidence from a Gasoline Price-Fixing Case." American Economic Journal: Microeconomics, 5(3): 97-123.

DOI: 10.1257/mic.5.3.97

Abstract

We point out a fundamental difficulty of successfully colluding in retail markets with heterogeneous fi rms, and characterize the mechanism recent gasoline cartels in Canada used to sustain collusion. Heterogeneity in cost and network size necessitates arrangements whereby participants split the market unequally to favor stronger players. We characterize empirically the strategy and transfer mechanism using court documents containing summaries and extracts of conversations between participants. The mechanism implements transfers based on adjustment delays during price changes. We estimate that these delays can translate into substantial transfers and provide examples in which they can substantially reduce deviation frequency.

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Download Data Set (992.90 KB) | Online Appendix (219.15 KB) | Author Disclosure Statement(s) (41.12 KB)

Authors

Clark, Robert (CIRANO, Montreal and HEC Montreal)
Houde, Jean-François (U PA)

JEL Classifications

K21: Antitrust Law
L12: Monopoly; Monopolization Strategies
L71: Mining, Extraction, and Refining: Hydrocarbon Fuels
L81: Retail and Wholesale Trade; e-Commerce

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American Economic Journal: Microeconomics


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