IDEAS home Printed from https://ideas.repec.org/a/oup/jcomle/v10y2014i1p217-256..html
   My bibliography  Save this article

Price Hysteresis After Antitrust Enforcement: Evidence From Spanish Food Markets

Author

Listed:
  • José Manuel Ordóñez-de-Haro
  • José Luis Torres

Abstract

This article provides additional empirical evidence regarding the effects of antitrust enforcement on consumer prices in prosecuted markets. We focus on the effect of the Spanish Competition Authority investigation and prosecution of several Spanish food associations for alleged collective price recommendations against the Spanish Competition Act by analyzing the subsequent price behavior for their respective products. The results show that antitrust enforcement may lead to a reduction in food price volatility and, in some cases, may even cause long periods of price rigidity in the concerned markets. We consider that observed hysteresis in prices may be due to the disruption of the mechanism played by associations in the transmission of information about how to pass on the cost shocks to their customers or, importantly, to the change in pricing behavior by keeping prices above competitive levels, but stable enough to minimize the risk of another antitrust intervention. This strategic conduct would be in line with the findings in the theoretical literature about collusion in the presence of competition authorities.

Suggested Citation

  • José Manuel Ordóñez-de-Haro & José Luis Torres, 2014. "Price Hysteresis After Antitrust Enforcement: Evidence From Spanish Food Markets," Journal of Competition Law and Economics, Oxford University Press, vol. 10(1), pages 217-256.
    • Handle: RePEc:oup:jcomle:v:10:y:2014:i:1:p:217-256.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/joclec/nht029
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Kai Hüschelrath & Nina Leheyda & Patrick Beschorner, 2010. "Assessing The Effects Of A Road-Surfacing Cartel In Switzerland," Journal of Competition Law and Economics, Oxford University Press, vol. 6(2), pages 335-374.
    2. Newmark, Craig M, 1988. "Does Horizontal Price Fixing Raise Price? A Look at the Bakers of Washington Case," Journal of Law and Economics, University of Chicago Press, vol. 31(2), pages 469-484, October.
    3. Erutku, Can, 2012. "Testing post-cartel pricing during litigation," Economics Letters, Elsevier, vol. 116(3), pages 339-342.
    4. Feinberg, Robert M., 1984. "Strategic and deterrent pricing responses to antitrust investigations," International Journal of Industrial Organization, Elsevier, vol. 2(1), pages 75-84, March.
    5. Can Erutku & Vincent A. Hildebrand, 2010. "Conspiracy at the Pump," Journal of Law and Economics, University of Chicago Press, vol. 53(1), pages 223-237, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    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. 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..
    3. Kurdoglu, Berkay & Yucel, Eray, 2022. "A Cointegration-based cartel screen for detecting collusion," MPRA Paper 113888, University Library of Munich, Germany.
    4. Chowdhury, Subhasish M. & Crede, Carsten J., 2020. "Post-cartel tacit collusion: Determinants, consequences, and prevention," International Journal of Industrial Organization, Elsevier, vol. 70(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. González, Xulia & Moral, María J., 2019. "Effects of antitrust prosecution on retail fuel prices," International Journal of Industrial Organization, Elsevier, vol. 67(C).
    2. Benjamin Atkinson, Andrew Eckert, and Douglas S. West, 2014. "Daily Price Cycles and Constant Margins: Recent Events in Canadian Gasoline Retailing," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3).
    3. 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.
    4. Robert M. Feinberg & Minsoo Park, 2015. "Deterrence Effects Of Korean Antitrust Enforcement On Producer Prices And Profit Margins," Journal of Competition Law and Economics, Oxford University Press, vol. 11(4), pages 917-933.
    5. Chowdhury, Subhasish M. & Crede, Carsten J., 2020. "Post-cartel tacit collusion: Determinants, consequences, and prevention," International Journal of Industrial Organization, Elsevier, vol. 70(C).
    6. Connor, John M. & Bolotova, Yuliya, 2006. "Cartel overcharges: Survey and meta-analysis," International Journal of Industrial Organization, Elsevier, vol. 24(6), pages 1109-1137, November.
    7. Xavier Vanssay & Can Erutku, 2011. "Damage at the Pump: Does Punishment Fit the Crime?," Journal of Industry, Competition and Trade, Springer, vol. 11(4), pages 351-367, December.
    8. Kalyn Coatney & Jesse Tack, 2014. "The Impacts of an Antitrust Investigation: A Case Study in Agriculture," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 44(4), pages 423-441, June.
    9. Verena Hahn, 2000. "Antitrust Enforcement: Abuse Control or Notification?," European Journal of Law and Economics, Springer, vol. 10(1), pages 69-91, July.
    10. Thierry Pénard & Saïd Souam, 2002. "Collusion et politique de la concurrence en information asymétrique," Annals of Economics and Statistics, GENES, issue 66, pages 209-233.
    11. Philippe Cyrenne, 1999. "On Antitrust Enforcement and the Deterrence of Collusive Behaviour," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 14(3), pages 257-272, May.
    12. Jing Xu & Alan T. Murray, 2019. "Spatial variability in retail gasoline markets," Asia-Pacific Journal of Regional Science, Springer, vol. 3(2), pages 581-603, June.
    13. repec:dgr:rugsom:14027-eef is not listed on IDEAS
    14. Stephanie Assad & Robert Clark & Daniel Ershov & Lei Xu, 2020. "Algorithmic Pricing and Competition: Empirical Evidence from the German Retail Gasoline Market," CESifo Working Paper Series 8521, CESifo.
    15. Häckner, Jonas & Herzing, Mathias, 2022. "The strategic interaction between cartels and anti-trust authorities," International Review of Law and Economics, Elsevier, vol. 70(C).
    16. Paul Zimmerman & John Yun & Christopher Taylor, 2013. "Edgeworth Price Cycles in Gasoline: Evidence from the United States," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 42(3), pages 297-320, May.
    17. Robert M. Feinberg, 2014. "State antitrust enforcement in the US and implications for small business entry and relocation," Applied Economics, Taylor & Francis Journals, vol. 46(7), pages 769-779, March.
    18. Robert Clark & Jean-François Houde, 2014. "The Effect of Explicit Communication on pricing: Evidence from the Collapse of a Gasoline Cartel," Journal of Industrial Economics, Wiley Blackwell, vol. 62(2), pages 191-228, June.
    19. Robert W. Crandall & Clifford Winston, 2005. "Does antitrust policy improve consumer welfare? Assessing the evidence," Chapters, in: Colin Robinson (ed.), Governments, Competition and Utility Regulation, chapter 2, Edward Elgar Publishing.
    20. Rémi Perronne & Mourad Hannachi & Stéphane Lemarié & Aline Fugeray-Scarbel & Isabelle Goldringer, 2016. "L'évolution de la filière blé tendre en France entre 1980 et 2006 : quelle influence sur la diversité cultivée," Post-Print hal-01478404, HAL.
    21. Kai Hüschelrath & Nina Leheyda & Patrick Beschorner, 2010. "Assessing The Effects Of A Road-Surfacing Cartel In Switzerland," Journal of Competition Law and Economics, Oxford University Press, vol. 6(2), pages 335-374.

    More about this item

    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:jcomle:v:10:y:2014:i:1:p:217-256.. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://academic.oup.com/jcle .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.