Antitrust authorities often consider parallel pricing and market share stability to be clues of illegal collusion. To analyze whether this inference is correct, I develop a model of price competition with differentiated products in which demand and costs vary over time. In many cases parallel pricing does not distinguish between a competitive and a collusive outcome. However, in some cases perfect parallel pricing is compatible only with a competitive equilibrium, and therefore provides some evidence that firms did not collude. I also show that the competitive equilibrium is characterized by a higher market share stability than a collusive equilibrium.
Editor-in-Chief: Parisi, Francesco
Ed. by Cooter, Robert D. / Gómez Pomar, Fernando / Kornhauser, Lewis A.
1 Issue per year
Issues
Volume 8 (2012)
Volume 7 (2011)
Volume 6 (2010)
Volume 5 (2009)
Volume 4 (2008)
Volume 3 (2007)
Volume 2 (2006)
Most Downloaded Articles
- Federalism, Budget Deficits and Public Debt: On the Reform of Germany's Fiscal Constitution by Feld, Lars P. and Baskaran, Thushyanthan
- On the Behavioral Economics of Crime by van Winden, Frans A.A.M. and Ash, Elliott
- Judicial Review in China: A Positive Political Economy Analysis by Ip, Eric C.
- The Costs and Benefits of Secured Creditor Control in Bankruptcy: Evidence from the UK by Armour, John/ Hsu, Audrey Wen-hsin and Walters, Adrian
- Emissions Trading and the Polluter-Pays Principle: Do Polluters Pay under Grandfathering? by Woerdman, Edwin/ Arcuri, Alessandra and Clò, Stefano
Does Parallel Behavior Provide Some Evidence of Collusion?
Paolo Buccirossi
1LEAR – Laboratorio di economia, antitrust regolamentazione, Rome
Citation Information: Review of Law & Economics. Volume 2, Issue 1, Pages 85–102, ISSN (Online) 1555-5879, DOI: 10.2202/1555-5879.1027, July 2006
Publication History:
- Published Online:
- 2006-07-27
Comments (0)