IDEAS home Printed from https://ideas.repec.org/a/sgh/gosnar/y2011i10p39-57.html
   My bibliography  Save this article

Powstawanie i stabilność karteli heterogenicznych

Author

Listed:
  • Jacek Prokop

Abstract

The article focuses on the emergence and operation of cartels in sectors in which companies differ in terms of production costs. The author shows that stable cartels can operate in sectors made up of enterprises that are heterogeneous in terms of costs and based on price leadership. However, when it comes to the cartel formation process, there is a distinct difference between homogeneous and heterogeneous sectors. While the formation of a cartel in the case of homogenous firms may be difficult due to the 'free-rider' problem, the author notes, in the case of heterogeneous companies no such obstacles exist and it can be expected that the process of creating a stable cartel will end in success. The analysis was made using the author's own model of the cartel formation process in the form of a single-period non-cooperative game with simultaneous decisions made by participants. To investigate the behavior of enterprises in the formation and operation of cartels, the Nash equilibrium concept was used. On the basis of the results obtained, it can be concluded that in the case of a sector with heterogeneous enterprises, the role of antitrust offices significantly increased in comparison to markets with homogenous firms. The theoretical analysis made by the author is illustrated with a case study for a district heating pipe cartel.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Jacek Prokop, 2011. "Powstawanie i stabilność karteli heterogenicznych," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 10, pages 39-57.
    • Handle: RePEc:sgh:gosnar:y:2011:i:10:p:39-57
    as

    Download full text from publisher

    File URL: http://www.journalssystem.com/gna/pdf-101079-32660
    File Function: Full text
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, April.
    2. Morasch, Karl, 2000. "Strategic alliances as Stackelberg cartels - concept and equilibrium alliance structure," International Journal of Industrial Organization, Elsevier, vol. 18(2), pages 257-282, February.
    3. Claude d'Aspremont & Alexis Jacquemin & Jean Jaskold Gabszewicz & John A. Weymark, 1983. "On the Stability of Collusive Price Leadership," Canadian Journal of Economics, Canadian Economics Association, vol. 16(1), pages 17-25, February.
    4. Volker Nocke, 1999. "Cartel Stability under Capacity Constraints: The Traditional View Restored," STICERD - Economics of Industry Papers 23, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    5. Donsimoni, Marie-Paule, 1985. "Stable heterogeneous cartels," International Journal of Industrial Organization, Elsevier, vol. 3(4), pages 451-467, December.
    6. Valerie Y. Suslow, 2005. "Cartel contract duration: empirical evidence from inter-war international cartels," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 14(5), pages 705-744, October.
    7. Effrosyni Diamantoudi, 2005. "Stable cartels revisited," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 26(4), pages 907-921, November.
    8. Reinhard Selten, 1973. "A Simple Model of Imperfect Competition, where 4 are Few and 6 are Many," Center for Mathematical Economics Working Papers 008, Center for Mathematical Economics, Bielefeld University.
    9. Prokop, Jacek, 1999. "Process of dominant-cartel formation," International Journal of Industrial Organization, Elsevier, vol. 17(2), pages 241-257, 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. Prokop, Jacek & Karbowski, Adam, 2013. "R&D cooperation and industry cartelization," Economics Discussion Papers 2013-41, Kiel Institute for the World Economy (IfW Kiel).

    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. Johannes Paha, 2010. "Simulation and Prosecution of a Cartel with Endogenous Cartel Formation," MAGKS Papers on Economics 201007, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    2. Marc Escrihuela-Villar, 2009. "A note on cartel stability and endogenous sequencing with tacit collusion," Journal of Economics, Springer, vol. 96(2), pages 137-147, March.
    3. Aya Ahmed, 2015. "Asymmetric cartel formation under trade liberalization: Heterogeneous ï¬ rms with capacity constraints," Working Papers 2015.02, International Network for Economic Research - INFER.
    4. Iwan Bos & Joseph E. Harrington, Jr, 2010. "Endogenous cartel formation with heterogeneous firms," RAND Journal of Economics, RAND Corporation, vol. 41(1), pages 92-117, March.
    5. Yoshio Kamijo & Shigeo Muto, 2010. "Farsighted Coalitional Stability Of A Price Leadership Cartel," The Japanese Economic Review, Japanese Economic Association, vol. 61(4), pages 455-465, December.
    6. Odenkirchen, Johannes, 2017. "Pricing Behavior of Cartel Outsiders in Incomplete Cartels," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168309, Verein für Socialpolitik / German Economic Association.
    7. Roman Inderst & Frank P. Maier-Rigaud & Ulrich Schwalbe, 2014. "Umbrella Effects," Journal of Competition Law and Economics, Oxford University Press, vol. 10(3), pages 739-763.
    8. Bartolini David & Zazzaro Alberto, 2011. "The Impact of Antitrust Fines on the Formation of Collusive Cartels," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-30, September.
    9. Mariana Cunha & Paula Sarmento, 2014. "Does Vertical Integration Promote Downstream Incomplete Collusion? An Evaluation of Static and Dynamic Stability," Journal of Industry, Competition and Trade, Springer, vol. 14(1), pages 1-38, March.
    10. Ludwig Auer & Tu Anh Pham, 2021. "Optimal destabilization of cartels," Journal of Regulatory Economics, Springer, vol. 59(2), pages 175-192, April.
    11. Ludwig von Auer & Tu Anh Pham, 2019. "Optimal Destabilization of Cartels," Research Papers in Economics 2019-07, University of Trier, Department of Economics.
    12. Paul Belleflamme & Francis Bloch, 2004. "Market sharing agreements and collusive networks," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 45(2), pages 387-411, May.
    13. Christos Papahristodoulou, 2019. "Internal and External Cartel Stability: Numerical Solutions," Computational Economics, Springer;Society for Computational Economics, vol. 53(4), pages 1451-1465, April.
    14. Ludovic Renou, 2011. "Group Formation and Governance," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 13(4), pages 595-630, August.
    15. Marc Escrihuela, 2002. "Cartel Sustainability And Cartel Stability," Working Papers. Serie AD 2002-16, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    16. Iwan Bos & Joseph E. Harrington, 2015. "Competition Policy And Cartel Size," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 56(1), pages 133-153, February.
    17. Margaret C. Levenstein & Valerie Y. Suslow, 2011. "Breaking Up Is Hard to Do: Determinants of Cartel Duration," Journal of Law and Economics, University of Chicago Press, vol. 54(2), pages 455-492.
    18. Georg Clemens & Holger A. Rau, 2022. "Either with us or against us: experimental evidence on partial cartels," Theory and Decision, Springer, vol. 93(2), pages 237-257, September.
    19. Hasnas, Irina & Wey, Christian, 2015. "Full versus partial collusion among brands and private label producers," DICE Discussion Papers 190, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    20. Toshiyuki Hirai, 2018. "Single-payoff farsighted stable sets in strategic games with dominant punishment strategies," International Journal of Game Theory, Springer;Game Theory Society, vol. 47(4), pages 1087-1111, November.

    More about this item

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection

    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:sgh:gosnar:y:2011:i:10:p:39-57. 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: Grzegorz Konat (email available below). General contact details of provider: https://edirc.repec.org/data/sgwawpl.html .

    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.