Arbeitspapier

A simple way to identify the degree of collusion under proportional reduction

Proportional reduction is a common cartel practice, in which cartel members reduce their output by the same percentage. We develop a simple method to quantify this reduction relative to a benchmark market equilibrium scenario. Our measure is continuous, has a simple interpretation as the "degree of collusion" and nests the earlier models in the existing literature. More importantly, by exploiting firms ex post heterogeneity and optimality conditions, Corts (1999) critique can be addressed by estimating time-varying degree of industry monopolization from a short panel of firm-level observations. We illustrate the method in Monte-Carlo simulations and in application to the data from the Joint Executive Committee railroad cartel.

Language: Englisch

Bibliographic citation: Series: SFB/TR 15 Discussion Paper ; No. 497

Classification: Wirtschaft
Firm Behavior: Empirical Analysis
Monopolization; Horizontal Anticompetitive Practices
Multiple or Simultaneous Equation Models: Instrumental Variables (IV) Estimation

Subject: Cartel
Proportional Reduction
Degree of collusion

Event: Geistige Schöpfung

(who): Shcherbakov, Oleksandr
Wakamori, Naoki

Event: Veröffentlichung

(who): Sonderforschungsbereich/Transregio 15 - Governance and the Efficiency of Economic Systems (GESY)

(where): München

(when): 2015

DOI: doi:10.5282/ubm/epub.24505

Handle: http://hdl.handle.net/10419/121365

URN: urn:nbn:de:bvb:19-epub-24505-5

Last update: 10.03.2025, 11:45 AM CET

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Object type

Arbeitspapier

Associated

Shcherbakov, Oleksandr
Wakamori, Naoki
Sonderforschungsbereich/Transregio 15 - Governance and the Efficiency of Economic Systems (GESY)

Time of origin

2015

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The effectiveness of leniency programs when firms choose the degree of collusion

Preprint

Suspecting Collusion

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Detecting collusion

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A simple GMM estimator for the semi-parametric mixed proportional hazard model

Comparing IV with structural models: What simple IV can and cannot identify

Arbeitspapier

Comparing IV with structural models: What simple IV can and cannot identify

Arbeitspapier

Better Workers Move to Better Firms: A Simple Test to Identify Sorting

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Comparing IV with structural models: what simple IV can and cannot identify

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A simple way to identify the degree of collusion under proportional reduction

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Other Objects (12)

Identifying the degree of collusion under proportional reduction

The effectiveness of leniency programs when firms choose the degree of collusion

Suspecting Collusion

Detecting collusion

Private Observation, Tacit Collusion and Collusion with Communication

A simple GMM estimator for the semi-parametric mixed proportional hazard model

A simple GMM estimator for the semi-parametric mixed proportional hazard model

Comparing IV with structural models: What simple IV can and cannot identify

Comparing IV with structural models: What simple IV can and cannot identify

Better Workers Move to Better Firms: A Simple Test to Identify Sorting

Comparing IV with structural models: what simple IV can and cannot identify

Gender and Collusion

Identifying the degree of collusion under proportional reduction

The effectiveness of leniency programs when firms choose the degree of collusion

Suspecting Collusion

Detecting collusion

Private Observation, Tacit Collusion and Collusion with Communication

A simple GMM estimator for the semi-parametric mixed proportional hazard model

A simple GMM estimator for the semi-parametric mixed proportional hazard model

Comparing IV with structural models: What simple IV can and cannot identify

Comparing IV with structural models: What simple IV can and cannot identify

Better Workers Move to Better Firms: A Simple Test to Identify Sorting

Comparing IV with structural models: what simple IV can and cannot identify

Gender and Collusion

Identifying the degree of collusion under proportional reduction

The effectiveness of leniency programs when firms choose the degree of collusion

Suspecting Collusion

Detecting collusion

Private Observation, Tacit Collusion and Collusion with Communication

A simple GMM estimator for the semi-parametric mixed proportional hazard model

A simple GMM estimator for the semi-parametric mixed proportional hazard model

Comparing IV with structural models: What simple IV can and cannot identify

Comparing IV with structural models: What simple IV can and cannot identify

Better Workers Move to Better Firms: A Simple Test to Identify Sorting

Comparing IV with structural models: what simple IV can and cannot identify

Gender and Collusion

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