Multi-market collusion with demand linkages and antitrust enforcement

Arbeitspapier

This paper analyzes dynamic cartel formation and antitrust enforcement when firms operate in demand-related markets. We show that cartel prosecution can have a knock-on effect: desisting a cartel in one market reduces profits and cartel stability and leads to the break-up of the cartel in the adjacent market. Cartel prosecution can also have a waterbed effect: desisting a cartel increases cartel stability in the adjacent market and induces cartel formation in previously competitive markets. We also consider policy implications of our analysis regarding an antitrust authority's investment decision in cartel enforcement.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 2632

Classification and Topics

• Classification: Wirtschaft ; Oligopoly and Other Imperfect Markets ; Monopolization; Horizontal Anticompetitive Practices ; Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection
• Subject: cartel formation ; demand linkage ; antitrust enforcement ; Kartell ; Wettbewerbsbeschränkung ; Kartellverfahren ; Nachfrage ; Lieferanten-Kunden-Beziehung ; Wirkungsanalyse ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Choi, Jay Pil ; Gerlach, Heiko A.
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2009

Further information

• Handle: http://hdl.handle.net/10419/30483
• Last update: 10.03.2025, 11:43 AM CET