The Effects of Cartel Damage Compensations

Optimal Cartel Pricing in the Presence of an Antitrust Authority∗ by Joseph

The dynamic behavior of a price-fixing cartel is explored when it is concerned about creating suspicions that a cartel has formed. Consistent with preceding static theories, the cartel’s steady-state price is decreasing in the damage multiple and the probability of detection. However, contrary to those theories, it is independent of the level of fixed fines. It is also shown that the cartel pri...

The Cartel-Fringe Equilibrium with Sluggish Demand

The demand for some products, such as energy, does not instantaneously respond to price changes. In fact, sluggishness of the demand is an important characteristic of energy and oil markets. This study examines the effect of demand sluggishness on the price and output of a fossil fuel industry in which a cartel and a fringe firm supply in the market. The cartel has larger reserves and less cost...

Treatment of Whistleblowers in Minimizing Cartel Damage

Investigating Whether the Gas Exporting Countries Forum (GECF) Can be Considered a Cartel: Application of Autoregressive Distributed Lag Bound Test and the Toda-Yamamoto Causality Test

The natural gas market is currently undergoing dramatic changes and is becoming globalized. One of the major developments in the global natural gas market in recent years is the establishment of the Gas Exporting Countries Forum (GECF). Since the founding of this forum, there have been many speculations about whether GECF would become a cartel like OPEC. Cartels contributes to the coordination ...

Cartel Destabilization and Leniency Programs – Empirical Evidence

Leniency programs as a tool for cartel detection and cartel destabilization, have been implemented since the early nineties. Theoretical work has shown that leniency programs can be effective in enhancing cartel detection and deterrence, but these effects are not straightforward. It is even possible that there is an increase in the total number of cartels. Empirical evidence shows that the posi...