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Cartels Uncovered

  • Ari Hyytinen
  • Frode Steen
  • Otto Toivanen
American Economic Journal: Microeconomics
vol. 10, no. 4, November 2018
(pp. 190-222)
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Abstract

How many cartels are there, and how long do they live? The answers to these questions are important in assessing the need for competition policy. We present a Hidden Markov Model that takes into account that often it is not known whether a cartel exists or not. We take the model to data from a period of legal cartels—Finnish manufacturing industries 1951–1990. Our estimates suggest that once born, cartels are persistent; by the end of the period, almost all industries were cartelized.

Citation

Hyytinen, Ari, Frode Steen, and Otto Toivanen. 2018. "Cartels Uncovered." American Economic Journal: Microeconomics, 10 (4): 190-222. DOI: 10.1257/mic.20160326

Additional Materials

JEL Classification

  • D43 Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection
  • K21 Antitrust Law
  • L12 Monopoly; Monopolization Strategies
  • L13 Oligopoly and Other Imperfect Markets
  • L41 Monopolization; Horizontal Anticompetitive Practices
  • L60 Industry Studies: Manufacturing: General
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