The Pro-collusive Effect of Increasing the Repose Period for Price Fixing Agreements

Jeroen Hinloopen 1 , 1
  • 1 Universiteit van Amsterdam and Katholieke Universiteit Leuven, j.hinloopen@uva.nl

Abstract

Intuitively, extending the period of repose for price fixing agreements enhances the effectiveness of competition policy enforcement. This paper proves this intuition wrong. As extending the repose period reduces cartel members' defection payoff while it leaves unaltered expected compliance profits, it induces cartels to be more stable internally.

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The B.E. Journal of Economic Analysis & Policy (BEJEAP) is an international forum for scholarship that employs microeconomics to analyze issues in business, consumer behavior and public policy. Topics include the interaction of firms, the functioning of markets, the effects of domestic and international policy and the design of organizations and institutions.

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