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MARKET POWER AND COLLUSION IN THE OCEAN SHIPPING INDUSTRY: IS A BIGGER CARTEL A BETTER CARTEL?
Author(s) -
CLYDE PAUL S.,
REITZES JAMES D.
Publication year - 1998
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.1998.tb01715.x
Subject(s) - cartel , collusion , market power , scrutiny , market structure , economics , government (linguistics) , agency (philosophy) , market concentration , industrial organization , business , market economy , monopoly , law , linguistics , philosophy , political science , epistemology
The regulatory structure of the ocean shipping industry allows carriers to enter into joint pricing agreements (conference agreements) that are free from antitrust scrutiny, and requires freight rates to be published and policed by a government agency. We test whether this regulatory structure leads to the exercise of market power, and identify whether that market power resides with conferences themselves or requires the participation of carriers outside the conference. The results suggest that liner conferences are not particularly effective cartels although some market power may exist in ocean shipping. Market concentration may be a contributing factor to this market power. (JEL L12, L43, L92, K21)