Coordination in the Fight against Collusion
American Economic Journal: Microeconomics
vol. 16,
no. 1, February 2024
(pp. 224-61)
Abstract
While antitrust authorities strive to detect, prosecute, and thereby deter collusive conduct, entities harmed by that conduct are also advised to pursue their own strategies to deter collusion. The implications of such delegation of deterrence have largely been ignored, however. In a procurement context, we find that buyers may prefer to accommodate rather than deter collusion among their suppliers. We also show that a multimarket buyer, such as a centralized procurement authority, may optimally deter collusion when multiple independent buyers would not, consistent with the view that "large" buyers are less susceptible to collusion.Citation
Iossa, Elisabetta, Simon Loertscher, Leslie M. Marx, and Patrick Rey. 2024. "Coordination in the Fight against Collusion." American Economic Journal: Microeconomics, 16 (1): 224-61. DOI: 10.1257/mic.20220194Additional Materials
JEL Classification
- D21 Firm Behavior: Theory
- D43 Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection
- D44 Auctions
- L12 Monopoly; Monopolization Strategies
- L14 Transactional Relationships; Contracts and Reputation; Networks
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