Antitrust as facilitating factor for collusion

I. Bos; W.A. Letterie; A.J. Vermeulen

doi:10.1515/bejeap-2014-0023

Antitrust as facilitating factor for collusion

I. Bos^*, W.A. Letterie, A.J. Vermeulen

^*Corresponding author for this work

Research output: Contribution to journal › Article › Academic › peer-review

Abstract

This paper examines collusion among firms whose discount factors are private information. Mutual uncertainty regarding intentions to restrict competition might undermine the possibility of tacit collusion. Firms that want to collude may, however, reveal their intentions by consciously acting in breach of antitrust laws. As antitrust activity makes explicit collusion costly in expected terms, it can potentially be (ab)used as signaling device. We show that the fight against cartels may indeed facilitate collusion.

Original language	English
Pages (from-to)	797-814
Number of pages	18
Journal	B E Journal of Economic Analysis & Policy
Volume	15
Issue number	2
DOIs	https://doi.org/10.1515/bejeap-2014-0023
Publication status	Published - Apr 2015

Keywords

antitrust enforcement
cartel formation
explicit collusion
tacit collusion
TACIT COLLUSION
MEETINGS
ENFORCEMENT
SMOKE-FILLED ROOMS
COMMUNICATION

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10.1515/bejeap-2014-0023

Cite this

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KW - MEETINGS

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