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Price Wars and the Stability of Collusion: A Study of the Pre-World War I Bromine Industry

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  • Margaret Levenstein

Abstract

Bromine producers colluded to raise prices and profits during most of the period between 1885 and 1914. Collusion was punctuated by price wars in which prices fell sharply. The characteristics of these price wars are compared with those in the Green-Porter and Abreu- Pearce-Stachetti models. Some of the bromine price wars resulted from the imperfect monitoring problems in these models. Those price wars were short and mild. More severe price wars were part of a bargaining process, in which firms tried to force a renegotiation to a new collusive equilibrium with a different distribution of rents.

Suggested Citation

  • Margaret Levenstein, 1993. "Price Wars and the Stability of Collusion: A Study of the Pre-World War I Bromine Industry," NBER Historical Working Papers 0050, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberhi:0050
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    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • N61 - Economic History - - Manufacturing and Construction - - - U.S.; Canada: Pre-1913

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