Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/103543
Authors: 
Harrington, Joseph E.
Hüschelrath, Kai
Laitenberger, Ulrich
Smuda, Florian
Year of Publication: 
2014
Series/Report no.: 
ZEW Discussion Papers 14-084
Abstract: 
We hypothesize a particular source of cartel instability and explore its relevance to understanding cartel dynamics. The cartel instability is rooted in the observation that, upon cartel formation, the relative positions of firms are often fixed which may lead some growthconscious members to be discontent. This incongruity between a cartel member's allocated market share and its desired market share may result in systematic deviations and the eventual collapse of the cartel. This hypothesis is then taken to the German cement cartel of 1991-2002. We argue that Readymix was such a discontent cartel member and, using a rich pricing data set, are able to characterize how Readymix deviated, how other firms responded, and how it led to the collapse of the cartel.
Subjects: 
collusion
cartel
antitrust enforcement
cement
JEL: 
L41
K21
Document Type: 
Working Paper

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