Business Economics and Public Policy Papers
Document Type
Journal Article
Date of this Version
10-2011
Publication Source
American Economic Review
Volume
101
Issue
6
Start Page
2425
Last Page
2449
DOI
10.1257/aer.101.6.2425
Abstract
Motivated by recent cartel practices, a stable collusive agreement is characterized when firms' prices and quantities are private information. Conditions are derived whereby an equilibrium exists in which firms truthfully report their sales and then make transfers within the cartel based on these reports. The properties of this equilibrium fit well with the cartel agreements in a number of markets including citric acid, lysine, and vitamins.
Copyright/Permission Statement
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Recommended Citation
Harrington, J. E., & Skrzypacz, A. (2011). Private Monitoring and Communication in Cartels: Explaining Recent Collusive Practices. American Economic Review, 101 (6), 2425-2449. http://dx.doi.org/10.1257/aer.101.6.2425
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Date Posted:08 September 2018
This document has been peer reviewed.