Assessing the effects of a road surfacing cartel in Switzerland

Posted by D. Daniel Sokol

Kai Hüschelrath (Department for Industrial Economics and International Management, ZEW Centre for European Economic Research; Assistant Professor for Industrial Organization and Competitive Strategy, WHU Otto Beisheim School of Management), Nina Leheyda (Department for Industrial Economics and International Management, ZEW Centre for European Economic Research), and Patrick Beschorner (Department for Industrial Economics and International Management, ZEW Centre for European Economic Research) have a paper on Assessing the effects of a road surfacing cartel in Switzerland. 

ABSTRACT: The paper assesses the impact of the detection of a hard-core cartel in the Swiss market for road surfacing on post-cartel competition. In addition to an investigation of supply-side factors, demand-side factors, and market prices, the paper also derives estimates of the economic effects of the Swiss Competition Commission's decision in the road-surfacing cartel case. The results indicate that the detection of the cartel may have led to short-term price reductions; however, the persistent collusion-friendly industry structure forecloses larger and durable gains for the customers.