|Andreoli-Versbach, Patrick; Franck, Jens-Uwe (July 2013): Actions Speak Louder than Words: Econometric Evidence to Target Tacit Collusion in Oligopolistic Markets. Discussion Papers in Economics 2013-8|
Tacit collusion reduces welfare comparably to explicit collusion but remains mostly unaddressed by antitrust enforcement which greatly depends on evidence of explicit communication. We propose to target specific elements of firms’ behavior that facilitate tacit collusion by providing quantitative evidence that links these actions to an anticompetitive market outcome. We apply our approach to incidents on the Italian gasoline market where the market leader unilaterally announced its commitment to a policy of sticky pricing and large price changes which facilitated price alignment and coordination of price changes. Antitrust policy has to distinguish such active promotion of a collusive strategy from passive (best response) alignment. Our results imply the necessity of stronger legal instruments which target unilateral conduct that aims at bringing about collusion.
|Item Type:||Paper (Discussion Paper)|
|Keywords:||antitrust law, tacit collusion, oligopolistic competition, gasoline market|
|Faculties:||Economics > Munich Discussion Papers in Economics|
|Subjects:||300 Social sciences > 330 Economics|
|JEL Classification:||K21, K42, L13, L71, L41|
|Deposited On:||30. Jul 2013 12:53|
|Last Modified:||29. Apr 2016 09:50|
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