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Effect Of Firm Organizational Structure On Incentives To Engage In Price Fixing

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  • JON M. JOYCE

Abstract

This article examines price fixing and bid rigging by applying the theory of the economics of crime to explain the calculus of the individual decision maker in the firm. This approach departs somewhat from the traditional approach to investigations of collusion. The latter has emphasized market structure and firm interrelationships while it has ignored the characteristics of the firm itself. But analyses ignoring firm organizational and financial structure are incomplete insomuch as these factors are crucial to the incentives and costs that the decision maker confronts. This paper offers an alternative approach in which price‐fixing and bid‐rigging offenders' prominent characteristics apparently are mirrored in defendant firms and individuals that the Antitrust Division has prosecuted recentlv.

Suggested Citation

  • Jon M. Joyce, 1989. "Effect Of Firm Organizational Structure On Incentives To Engage In Price Fixing," Contemporary Economic Policy, Western Economic Association International, vol. 7(4), pages 19-35, October.
    • Handle: RePEc:bla:coecpo:v:7:y:1989:i:4:p:19-35
    DOI: 10.1111/j.1465-7287.1989.tb00573.x
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    References listed on IDEAS

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    1. Fraas, Arthur G & Greer, Douglas F, 1977. "Market Structure and Price Collusion: An Empirical Analysis," Journal of Industrial Economics, Wiley Blackwell, vol. 26(1), pages 21-44, September.
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    Cited by:

    1. John Thompson & David Kaserman, 2001. "After The Fall: Stock Price Movements and the Deterrent Effect of Antitrust Enforcement," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 19(3), pages 329-334, November.

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