Business Economics and Public Policy Papers
Document Type
Journal Article
Date of this Version
11-2014
Publication Source
International Journal of Industrial Organization
Volume
42
Start Page
106
Last Page
119
DOI
10.1016/j.ijindorg.2015.07.005
Abstract
We hypothesize a particular source of cartel instability and explore its relevance to understanding cartel dynamics. The cartel instability is rooted in the observation that, upon cartel formation, the relative positions of firms are often fixed which may lead some growth-conscious members to be discontent. This incongruity between a cartel member's allocated market share and its desired market share may result in systematic deviations and the eventual collapse of the cartel. This hypothesis is then taken to the German cement cartel of 1991–2002. We argue that Readymix was such a discontent cartel member and, using a rich pricing data set, are able to characterize how Readymix deviated, how other firms responded, and how it led to the collapse of the cartel.
Copyright/Permission Statement
© 2014. This manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/
Keywords
Collusion; Cartel; Antitrust enforcement; Cement
Recommended Citation
Harrington, J. E., Hüschelrath, K., Laitenberger, U., & Smuda, F. (2014). The Discontent Cartel Member and Cartel Collapse: The Case of the German Cement Cartel. International Journal of Industrial Organization, 42 106-119. http://dx.doi.org/10.1016/j.ijindorg.2015.07.005
Included in
Business Commons, Economics Commons, Public Affairs, Public Policy and Public Administration Commons
Date Posted: 27 November 2017
This document has been peer reviewed.