Journal Article10.1093/ICC/DTH075
Cartel contract duration: empirical evidence from inter-war international cartels
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TL;DR: In this article, a sample of legal formal cartel contracts and examining their structure and durability was taken, and the empirical model tested for the importance of demand uncertainty and cartel organizational characteristics in determining cartel contract duration.
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Abstract: A formal cartel organization sets up a multilateral relationship between firms in a given industry. While standard contracting literature has studied bilateral monopoly relationships in detail, there are horizontal relationships, like cartels, that also have contractual aspects. To shed light on how these contracts work, this paper takes a sample of legal formal cartel contracts and examines their structure and durability. Borrowing from industrial organization theories and transaction cost theories, the empirical model tests for the importance of demand uncertainty and cartel organizational characteristics in determining cartel contract duration. The results show that the more uncertain the environment within which the cartel operates, the shorter the expected cartel duration. Other industry structure characteristics and cartel organization variables included in the empirical model have a much weaker influence on duration. Copyright 2005, Oxford University Press.
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References
Cartel Overcharges: An Empirical Analysis
TL;DR: In this paper, the authors evaluate the impact of cartel characteristics and market environment on the size of the overcharges imposed by cartels in different geographic markets and during six antitrust law regimes starting from the 18th century.
Temporary Natural Resource Cartels
TL;DR: In this article, the behavior of a nonrenewable resource cartel that anticipates being forced, at some date in the future, to break up into an oligopolistic market in which its members will then have to compete as rivals is analyzed.