Membership, stability and internal institutions in European cartels

Havell, Richard (2015) Membership, stability and internal institutions in European cartels. Doctoral thesis, University of East Anglia.

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    Abstract

    The first topic this thesis examines is that of firms which enter and leave cartels without
    affecting the existence of the cartel. The first chapter predicts which firms in markets
    will choose to join and leave cartels. The findings align with a group of theoretical
    models identified in the literature review, indicating that cartel membership is explained
    by�firms' individual preferences for collusion, which are consistent over time. The firms
    most likely to join and leave cartels are small firms in large cartels.
    The second chapter questions what effect this behaviour by firms has on the survivability
    of cartels. Theory is ambiguous on this, since entry and exit by firms could signal poor
    discipline among cartelists which prevents the cartel from raising prices substantially due
    to undercutting by outsiders or it could signal a structurally stable cartel which marginal firms take advantage of in their membership decisions. Cartels which experienced more
    entry and exit by firms had a lower risk of breakdown in each period than cartels
    with more static membership, indicating that member firms recognise when cartels are
    strong and take advantage of this by constantly re-evaluating their membership decisions.
    The�final chapter discusses a different topic: the types of agreement formed by cartels.
    All cartels must agree to either �x prices, restrict the output of its members, allocate
    exclusive territories, allocation customers, or rig bids in order to fulfil their objective
    of raising member profits. Many cartels engage in more than one of these practices
    simultaneously. Structural variables are poor at predicting the presence of agreement
    types in the cartels studied, but distinct strategy pro�les where certain agreement types
    substitute for each other or complement each other are present. These strategy profiles
    appear to be associated with particular industries and cartels of common geographical
    scope.

    Item Type: Thesis (Doctoral)
    Faculty \ School: Faculty of Social Sciences > School of Economics
    Depositing User: Katie Miller
    Date Deposited: 16 May 2017 09:56
    Last Modified: 16 May 2017 09:56
    URI: https://ueaeprints.uea.ac.uk/id/eprint/63530
    DOI:

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