Arbeitspapier
Identifying the degree of collusion under proportional reduction
Proportional reduction is a common cartel practice in which cartel members reduce their output proportionately. We develop a method to quantify this reduction relative to a benchmark market equilibrium scenario and relate the reduction to the traditional conduct parameter. Our measure is continuous, allowing us to have an intuitive interpretation as the "degree of collusion" and nesting the earlier models in the existing literature. Furthermore, our methodology addresses Corts' (1999) critique by estimating timevarying degree of collusion from a short panel of firm-level observations, exploiting firms' ex post heterogeneity. We illustrate the method using the Joint Executive Committee railroad cartel data.
- Language
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Englisch
- Bibliographic citation
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Series: Bank of Canada Staff Working Paper ; No. 2017-51
- Classification
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Wirtschaft
Firm Behavior: Empirical Analysis
Monopolization; Horizontal Anticompetitive Practices
Multiple or Simultaneous Equation Models: Instrumental Variables (IV) Estimation
- Subject
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Econometric and statistical methods
Market structure and pricing
- Event
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Geistige Schöpfung
- (who)
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Shcherbakov, Oleksandr
Wakamori, Naoki
- Event
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Veröffentlichung
- (who)
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Bank of Canada
- (where)
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Ottawa
- (when)
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2017
- DOI
-
doi:10.34989/swp-2017-51
- Handle
- Last update
-
10.03.2025, 11:41 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Shcherbakov, Oleksandr
- Wakamori, Naoki
- Bank of Canada
Time of origin
- 2017
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