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The Influence of Collusion on Price Changes: New Evidence from Major Cartel Cases

Author

Listed:
  • Blanckenburg Korbinian von

    (University of Muenster, Institute of Public Economics,Münster, Germany)

  • Kholodilin Konstantin A.

    (German Institute for Economic Research (DIW Berlin),Berlin, Germany)

  • Geist Alexander

    (Federal Institute for Public Administration,Speyer, Germany)

Abstract

In this article, we compare the distribution of price changes between collusive and non-collusive periods for 11 major cartels. Based on the theoretical and empirical results from previous research, we discuss the four moments with respect to price changes (mean, variance, skewness and kurtosis). However, none of the above descriptive statistics can be considered as a robust test allowing a differentiation between competition and cartel. Therefore, we implement the Kolmogorov-Smirnov test. According to our results, 9 of 11 cartels were successful in controlling the market price for a number of years. The proposed methodology may be used for antitrust screening and regulatory purposes.

Suggested Citation

  • Blanckenburg Korbinian von & Kholodilin Konstantin A. & Geist Alexander, 2012. "The Influence of Collusion on Price Changes: New Evidence from Major Cartel Cases," German Economic Review, De Gruyter, vol. 13(3), pages 245-256, August.
    • Handle: RePEc:bpj:germec:v:13:y:2012:i:3:p:245-256
    DOI: 10.1111/j.1468-0475.2011.00558.x
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    Cited by:

    1. Carsten J. Crede, 2019. "A Structural Break Cartel Screen for Dating and Detecting Collusion," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 54(3), pages 543-574, May.
    2. Andreoli-Versbach, Patrick & Franck, Jens-Uwe, 2013. "Actions Speak Louder than Words: Econometric Evidence to Target Tacit Collusion in Oligopolistic Markets," Discussion Papers in Economics 16179, University of Munich, Department of Economics.
    3. Andrei Y. Shastitko & Svetlana V. Golovanova, 2014. "Collusion in markets characterized by one large buyer: lessons learned from an antitrust case in Russia," HSE Working papers WP BRP 49/EC/2014, National Research University Higher School of Economics.
    4. Bejger, Sylwester, 2015. "Screening for collusion: Evidences from the Indian cement industry," Business and Economic Horizons (BEH), Prague Development Center (PRADEC), vol. 11(2), pages 1-19.
    5. Daniele Cavicchioli, 2018. "Detecting Market Power Along Food Supply Chains: Evidence and Methodological Insights from the Fluid Milk Sector in Italy," Agriculture, MDPI, vol. 8(12), pages 1-22, December.
    6. Carsten J. Crede, 2015. "A structural break cartel screen for dating and detecting collusion," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2015-11, Centre for Competition Policy, University of East Anglia, Norwich, UK..
    7. Andreoli-Versbach, Patrick & Franck, Jens-Uwe, 2015. "Endogenous price commitment, sticky and leadership pricing: Evidence from the Italian petrol market," International Journal of Industrial Organization, Elsevier, vol. 40(C), pages 32-48.
    8. Jan Hendrik Preißler-Jebe, Korbinian von Blanckenburg, Alexander Geist, "undated". "Comparing Cartel Behavior: A Simulation Analysis with the System of Cartel Markers (SCM)," Working Papers 201041, Institute of Spatial and Housing Economics, Munster Universitary.
    9. Yaseen GHULAM, 2018. "The Impact Of Reforms And Privatization On Firms’ Conduct In The Presence Of Interconnected Conglomerates And Weak And Inefficient Regulatory Institutions," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 89(4), pages 599-622, December.
    10. Gordon Jochem Klein, 2019. "Cartel Destabilization and Leniency Programs – Empirical Evidence," Economics Bulletin, AccessEcon, vol. 39(3), pages 1918-1924.
    11. Silveira, Douglas & Vasconcelos, Silvinha & Resende, Marcelo & Cajueiro, Daniel O., 2022. "Won’t Get Fooled Again: A supervised machine learning approach for screening gasoline cartels," Energy Economics, Elsevier, vol. 105(C).
    12. Korbinian von Blanckenburg & Marc Hanfeld & Konstantin A. Kholodilin, 2013. "A Market Screening Model for Price Inconstancies: Empirical Evidence from German Electricity Markets," Discussion Papers of DIW Berlin 1274, DIW Berlin, German Institute for Economic Research.

    More about this item

    Keywords

    Cartel detection; collusion; competition policy;
    All these keywords.

    JEL classification:

    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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