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A Structural Break Cartel Screen for Dating and Detecting Collusion

Authors
  • Crede, Carsten J.1
  • 1 Bundeskartellamt (Federal Cartel Office), Kaiser-Friedrich-Str. 16, Bonn, 53113, Germany , Bonn (Germany)
Type
Published Article
Journal
Review of Industrial Organization
Publisher
Springer US
Publication Date
Jul 26, 2018
Volume
54
Issue
3
Pages
543–574
Identifiers
DOI: 10.1007/s11151-018-9649-5
Source
Springer Nature
Keywords
License
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Abstract

In this article, a new empirical screen for detecting cartels is developed. It can also be used to date the beginning of known conspiracies, which is often difficult in practice. Structural breaks that are induced by cartels in the data-generating process of industry prices are detected by testing reduced-form price equations for structural instability. The new screen is applied to three European markets for pasta products, in which it successfully reports the cartels that were present in the Italian and Spanish markets, but finds no suspicious patterns in the French market, which was not cartelised.

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