Multi-market collusion with demand linkages and antitrust enforcement

Choi, Jay Pil and Gerlach, Heiko (2013) Multi-market collusion with demand linkages and antitrust enforcement. Journal of Industrial Economics, 61 4: 987-1022. doi:10.1111/joie.12041

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Author Choi, Jay Pil
Gerlach, Heiko
Title Multi-market collusion with demand linkages and antitrust enforcement
Journal name Journal of Industrial Economics   Check publisher's open access policy
ISSN 0022-1821
Publication date 2013-12
Sub-type Article (original research)
DOI 10.1111/joie.12041
Open Access Status
Volume 61
Issue 4
Start page 987
End page 1022
Total pages 36
Place of publication Chichester, West Sussex, United Kingdom
Publisher Wiley-Blackwell Publishing
Collection year 2014
Language eng
Formatted abstract
This paper analyzes dynamic cartel formation and antitrust enforcement when firms operate in demand-related markets. We show that cartel prosecution can have a knock-on effect: bringing down a cartel in one market reduces profits and cartel stability and leads to the break-up of the cartel in the adjacent market. Cartel prosecution can also have a waterbed effect: disrupting a cartel increases cartel stability in the adjacent market and induces cartel formation in previously competitive markets. We discuss the impact of dynamic cartel formation on consumer surplus, explore antitrust spillovers, the optimal scope of antitrust interventions and cartel formation with local firms.
Q-Index Code C1
Q-Index Status Confirmed Code
Institutional Status UQ

Document type: Journal Article
Sub-type: Article (original research)
Collections: Official 2014 Collection
School of Economics Publications
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Citation counts: TR Web of Science Citation Count  Cited 2 times in Thomson Reuters Web of Science Article | Citations
Scopus Citation Count Cited 2 times in Scopus Article | Citations
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Created: Wed, 08 Jan 2014, 18:05:54 EST by Alys Hohnen on behalf of School of Economics