Cartels Uncovered | Zendy

Ari Hyytinen | Zendy; Frode Steen | Zendy; Otto Toivanen | Zendy

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Cartels Uncovered

Author(s) -

Ari Hyytinen,

Frode Steen,

Otto Toivanen

Publication year - 2018

Publication title -

american economic journal microeconomics

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 5.339

H-Index - 40

eISSN - 1945-7685

pISSN - 1945-7669

DOI - 10.1257/mic.20160326

Subject(s) - cartel , competition (biology) , period (music) , economics , law and economics , international trade , business , industrial organization , philosophy , collusion , ecology , biology , aesthetics

How many cartels are there, and how long do they live? The answers to these questions are important in assessing the need for competition policy. We present a Hidden Markov Model that takes into account that often it is not known whether a cartel exists or not. We take the model to data from a period of legal cartels—Finnish manufacturing industries 1951–1990. Our estimates suggest that once born, cartels are persistent; by the end of the period, almost all industries were cartelized. (JEL D43, K21, L12, L13, L41, L60)

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