Market power inside the Belgian coal industry, 1901-45: a new empirical industrial organisation approach

"We analyse the impact of economic cycle on firms ability to sustain a collusive behaviour inside the Belgian coal industry during the first half of the twentieth century. In order to define precisely the economic conjuncture, we consider the level of the demand (high/low) as well as its evolutions (downward/upward) so that we define four different states. Econometric results highlight the fact that prices are high during the first part of the economic cycle (i.e. demand is increasing). When demand approaches its peak, collusive firms must reduce their price in order to reduce the incentive to cheat on collusive agreements. In the downward part of the economic cycle, the collusive price must be reduced further in order to preserve collusive agreements."