Tuesday, July 13, 2010
Posted by D. Daniel Sokol
Bos Iwan, Peeters Ronald, Pot Erik (all METEOR) ask the provacative question Do Antitrust Agencies Facilitate Meetings in Smoke-Filled Rooms?
ABSTRACT: The theory of industrial collusion generally does not distinguish between tacit and explicit collusion. We show that if tacit collusion is not sustainable, firms may still be willing and able to collude explicitly when demand is viscous, the expected antitrust penalty is limited and antitrust agencies are sufficiently effective in detecting and prosecuting cartels.