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Another Look At The Impact Of The National Industrial Recovery Act On Cartel Formation And Maintenance Costs

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  • Matthew B. Krepps

Abstract

Alexander's (1994) finding that the National Recovery Administration's Codes of Fair Competition led to a change in the critical concentration level during the 1930s is questioned. No regime switch is detected when a common industry sample is employed. Also, when industries with and without codes are analyzed, codes appear to have no effect on price-cost margins during the period. This absence of effect is postulated to be a result of the unenforceability of trade practice provisions contained in many codes. The empirical results of this paper suggest that the existence of codes was not sufficient to enable industries to overcome cartel formation costs. Only easily enforceable trade practice provisions appear to have affected the structure-performance relation in the period following repeal of the National Industrial Recovery Act. © 1997 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology

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  • Matthew B. Krepps, 1997. "Another Look At The Impact Of The National Industrial Recovery Act On Cartel Formation And Maintenance Costs," The Review of Economics and Statistics, MIT Press, vol. 79(1), pages 151-154, February.
    • Handle: RePEc:tpr:restat:v:79:y:1997:i:1:p:151-154
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    Cited by:

    1. Rene Y. Kamita, 2010. "Analyzing the Effects of Temporary Antitrust Immunity: The Aloha-Hawaiian Immunity Agreement," Journal of Law and Economics, University of Chicago Press, vol. 53(2), pages 239-261, May.
    2. Chicu, Mark & Ziebarth, Nicolas L., 2013. "Multi-market contact and competition: evidence from the Depression-era portland cement industry," International Journal of Industrial Organization, Elsevier, vol. 31(5), pages 603-611.
    3. Chicu, Mark & Vickers, Chris & Ziebarth, Nicolas L., 2013. "Cementing the case for collusion under the National Recovery Administration," Explorations in Economic History, Elsevier, vol. 50(4), pages 487-507.
    4. Forsbacka, Tove & Le Coq, Chloé & Marvão, Catarina, 2023. "Cartel birth and death dynamics: Empirical evidence," International Journal of Industrial Organization, Elsevier, vol. 89(C).
    5. Margaret C. Levenstein & Valerie Y. Suslow, 2016. "Price Fixing Hits Home: An Empirical Study of US Price-Fixing Conspiracies," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 48(4), pages 361-379, June.
    6. Tanja Artiga González & Markus Schmid & David Yermack, 2019. "Does Price Fixing Benefit Corporate Managers?," Management Science, INFORMS, vol. 65(10), pages 4813-4840, October.
    7. Taylor, Jason E. & Neumann, Todd C., 2013. "The effect of institutional regime change within the new deal on industrial output and labor markets," Explorations in Economic History, Elsevier, vol. 50(4), pages 582-598.
    8. Alexander, Barbara & Libecap, Gary D., 2000. "The Effect of Cost Heterogeneity in the Success and Failure of the New Deal's Agricultural and Industrial Programs," Explorations in Economic History, Elsevier, vol. 37(4), pages 370-400, October.
    9. Connor, John M., 1997. "Archer Daniels Midland: Price Fixer To The World," Staff Papers 28653, Purdue University, Department of Agricultural Economics.
    10. Jason E. Taylor, 2007. "Cartel Code Attributes and Cartel Performance: An Industry-Level Analysis of the National Industrial Recovery Act," Journal of Law and Economics, University of Chicago Press, vol. 50(3), pages 597-624.
    11. Peter L Ormosi, 2011. "A tip of the iceberg? The probability of catching cartels," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2011-06, Centre for Competition Policy, University of East Anglia, Norwich, UK..
    12. Jason E. Taylor, 2011. "Work‐sharing During the Great Depression: Did the ‘President's Reemployment Agreement’ Promote Reemployment?," Economica, London School of Economics and Political Science, vol. 78(309), pages 133-158, January.
    13. Taylor Jason E, 2010. "The Welfare Impact of Collusion under Various Industry Characteristics: A Panel Examination of Efficient Cartel Theory," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(1), pages 1-29, October.

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