Date of this Version
Journal of the European Economic Association
One of the primary challenges to measuring the impact of antitrust or competition policy on collusion is that the cartel population is unobservable; we observe only the population of discovered cartels. To address this challenge, a model of cartel creation and dissolution is developed to endogenously derive the populations of cartels and discovered cartels. With this theory, one can infer the impact of competition policy on the population of cartels by measuring its impact on the population of discovered cartels. In particular, changes in the duration of discovered cartels can be informative in assessing whether a new policy is reducing the latent rate of cartels.
This is the peer reviewed version of the following article:Harrington, J. E. and Chang, M.-H. (2009), MODELING THE BIRTH AND DEATH OF CARTELS WITH AN APPLICATION TO EVALUATING COMPETITION POLICY. Journal of the European Economic Association, 7: 1400–1435. doi:10.1162/JEEA.2009.7.6.1400, which has been published in final form at http://dx.doi.org/10.1162/JEEA.2009.7.6.1400. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving http://olabout.wiley.com/WileyCDA/Section/id-820227.html#terms
Harrington, J. E. (2009). Modelling the Birth and Death of Cartels with an Application to Evaluating Competition Policy. Journal of the European Economic Association, 7 (6), 1400-1435. http://dx.doi.org/10.1162/JEEA.2009.7.6.1400
Date Posted: 27 November 2017
This document has been peer reviewed.