Measuring the Incentive to Collude: The Vitamin Cartels, 1990-99

• 成果类型: Article
• 署名作者: Igami, Mitsuru; Sugaya, Takuo
• 署名单位: Stanford University
• 刊物名称: REVIEW OF ECONOMIC STUDIES
• ISSN/ISSBN: 0034-6527
• DOI: 10.1093/restud/rdab052
• 发表日期: 2022
• 页码: 1460-1494
• 关键词: Repeated games; multimarket contact; price wars; differentiated products; folk theorem; collusion; industry; mergers; STABILITY; oligopoly

摘要

Do mergers help or hinder collusion? This article studies the stability of the vitamin cartels in the 1990s and presents a repeated-games approach to quantify coordinated effects of a merger. We use data and direct evidence from American courts and European agencies to show the collusive incentive of the short-lived vitamin C cartel was likely to be negative when it actually collapsed in 1995, whereas the incentives of the long-lived cartels (vitamins A and E, and beta carotene) were unambiguously positive until the prosecution in 1999. Simulations suggest some mergers could have prolonged the vitamin C cartel, but others could have further destabilized it, because both the direction and magnitude of coordinated effects depend not only on the number of firms but also on their cost asymmetry.