Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/261277 
Year of Publication: 
2021
Series/Report no.: 
Research Report No. 2021-6
Publisher: 
The University of Western Ontario, Department of Economics, London (Ontario)
Abstract: 
We analyze a hub-and-spoke cartel in the Brazilian automotive fuel industry. Using the court documents and detailed data on the supply chain we uncover three mechanisms beyond information sharing used by wholesalers (hub) to help retailers (spokes) solve the obstacles of price coordination: vertical transfers across asymmetric spokes; subsidies during punishment; and cost stabilization. We argue that wholesalers benefited from the cartel by being the exclusive supplier during the scheme. We use the synthetic control approach to quantify how successful the cartel was in increasing markups. We find that not only retailers, but wholesalers benefited from the cartel.
Subjects: 
Antitrust
Hub-and-Spoke Collusion
Vertical Restraints
JEL: 
K21
L12
D43
Document Type: 
Working Paper

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