Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/260479 
Year of Publication: 
2021
Series/Report no.: 
Queen’s Economics Department Working Paper No. 1473
Publisher: 
Queen's University, Department of Economics, Kingston (Ontario)
Abstract: 
Numerous recently uncovered cartels operated along the supply chain, with firms at one end facilitating collusion at the other - hub-and-spoke arrangements. These cartels are hard to rationalize because they induce double marginalization and higher costs. We examine Canada's alleged bread cartel and provide the first comprehensive analysis of hub-and-spoke collusion. We make three contributions: i) Using court documents and pricing data we provide evidence that collusion existed at both ends of the supply chain, ii) we show that collusion was effective, increasing inflation by about 40% and iii) we provide a model explaining why this form of collusion arose.
Subjects: 
antitrust
vertical collusion
grocery industry
JEL: 
L41
L44
L12
L13
D22
L66
Document Type: 
Working Paper

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