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Collusion Theory: Where to Go Next?

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  • Luís Cabral

Abstract

This note comments on Feuerstein's (Feuerstein, Switgard, “Collusion in industrial economics: A survey,” forthcoming in Journal of Industry, Competition and Trade, 2005) survey of collusion theory. I start by presenting evidence from a recent real-world collusion case: the lysine industry. Based on this, I point out a few areas where collusion theory can improve: (a) the problem of equilibrium choice (bargaining over each firm's share), which is especially important in asymmetric oligopolies; (b) the problem of equilibrium implementation, including in particular communication in an asymmetric information context; and (c) the relation between price wars and collusion. I conclude with a few notes on policy issues, namely leniency programs and cartel detection strategies. Copyright Springer Science + Business Media, Inc. 2005

Suggested Citation

  • Luís Cabral, 2005. "Collusion Theory: Where to Go Next?," Journal of Industry, Competition and Trade, Springer, vol. 5(3), pages 199-206, December.
    • Handle: RePEc:kap:jincot:v:5:y:2005:i:3:p:199-206
    DOI: 10.1007/s10842-005-4869-4
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    References listed on IDEAS

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    1. Susan Athey & Kyle Bagwell & Chris Sanchirico, 2004. "Collusion and Price Rigidity," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 71(2), pages 317-349.
    2. Chaim Fershtman & Ariel Pakes, 2000. "A Dynamic Oligopoly with Collusion and Price Wars," RAND Journal of Economics, The RAND Corporation, vol. 31(2), pages 207-236, Summer.
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    Cited by:

    1. Hans W. Friederiszick & Frank P. Maier-Rigaud, 2008. "Triggering Inspections Ex Officio: Moving Beyond A Passive Eu Cartel Policy," Journal of Competition Law and Economics, Oxford University Press, vol. 4(1), pages 89-113.
    2. Susan Athey & Andrzej Skrzypacz, 2017. "Yuliy Sannikov: Winner of the 2016 Clark Medal," Journal of Economic Perspectives, American Economic Association, vol. 31(2), pages 237-256, Spring.
    3. Stephen Davies & Oindrila De, 2013. "Ringleaders in Larger Number Asymmetric Cartels," Economic Journal, Royal Economic Society, vol. 123(11), pages 524-544, November.
    4. Do, Jihwan, 2022. "Cheating and compensation in price-fixing cartels," Journal of Economic Theory, Elsevier, vol. 200(C).
    5. Garcia Pires, Armando J. & Skjeret, Frode, 2023. "Screening for partial collusion in retail electricity markets," Energy Economics, Elsevier, vol. 117(C).
    6. Switgard Feuerstein, 2005. "Collusion in Industrial Economics—A Rejoinder," Journal of Industry, Competition and Trade, Springer, vol. 5(3), pages 235-239, December.

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