In Which Industries is Collusion More Likely? Evidence from the UK

Symeonidis, George

doi:10.1111/1467-6451.00191

Cited by 59 publications

(41 citation statements)

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“…As pointed out in Symeonidis (2003) and confirmed in Table 5 and only for a few of the years in my sample; also, they are often subject to measurement error. The import penetration ratio, on the other hand, is a poor proxy for the extent of foreign competition, since it cannot capture the effect of the mere threat of competitive imports, it does not take into account imports by domestic producers (which may not be in competition with domestic products), and it is itself endogenous.…”

Section: Econometric Modelmentioning

confidence: 54%

“…Finally, the procedure for constructing RD and ADV was essentially the same as in Symeonidis (2000aSymeonidis ( , 2000bSymeonidis ( , 2002Symeonidis ( , 2003; see these references for details and a list of the sources used.…”

Section: Appendix 2: Data Sources and Construction Of Variablesmentioning

confidence: 99%

“…Sales revenue was growing faster for industries with COLL = 0 than for industries with COLL = 1 during most of the period examined in this paper. This is not surprising given that the industries with COLL = 0 tended on the whole to be more advertising-intensive, more R&D-intensive, less unionised and less capital-intensive (see Symeonidis 2002Symeonidis , 2003, and Table 5 below), and such industries typically experience relatively fast growth. However, the difference in the sales growth rate between the two groups of industries was more pronounced after the collusive agreements had generally been abandoned (1963)(1964)(1965)(1966)(1967)(1968)(1969)(1970)(1971)(1972)(1973) than in the period when the cartels were in place (1954)(1955)(1956)(1957)(1958).…”

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confidence: 98%

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The Effect of Competition on Wages and Productivity: Evidence from the United Kingdom

Symeonidis

2008

Review of Economics and Statistics

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This paper examines the impact of competition on wages and productivity using a panel data set of UK manufacturing industries over [1954][1955][1956][1957][1958][1959][1960][1961][1962][1963][1964][1965][1966][1967][1968][1969][1970][1971][1972][1973]. The introduction of cartel law in the UK in the late 1950s caused an intensification of price competition in previously cartelized manufacturing industries, but it did not affect those industries which were not cartelized. The econometric results from a comparison of the two groups of industries before and after the introduction of cartel law provide strong evidence of a negative effect of collusion on labour productivity growth. There is no evidence of any effect of collusion on wages. These results are robust to controlling for the potential endogeneity of collusion and are further strengthened by a comparison with US data.

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Section: Econometric Modelmentioning

confidence: 54%

Section: Appendix 2: Data Sources and Construction Of Variablesmentioning

confidence: 99%

mentioning

confidence: 98%

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The Effect of Competition on Wages and Productivity: Evidence from the United Kingdom

Symeonidis

2008

Review of Economics and Statistics

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“…Using a large set of European Commission and U. S. Department of Justice decisions on price-fixing, Grout and Sonderegger (2005) provide a comprehensive examination of cartels. Related work is by Symeonedis (2003), who focuses on cartels in the United Kingdom, and Levenstein and Suslow (2006). The analyses of those papers focus on identifying industry traits that result in cartel formation, while my emphasis is on describing cartel behavior.…”

Section: Introductionmentioning

confidence: 99%

How Do Cartels Operate?

Harrington

2006

FNT in Microeconomics

212

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A Cataloging-in-Publication record is available from the Library of CongressThe preferred citation for this publication is J.E. Harrington, Jr., How Do Cartels Operate?, Foundation and Trends R in Microeconomics, vol 2, no 1, pp 2006 Printed on acid-free paper ISBN: 1-933019-87-5 c 2006 J.E. Harrington, Jr.All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, mechanical, photocopying, recording or otherwise, without prior written permission of the publishers. Photocopying. In the USA: This journal is registered at the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923. Authorization to photocopy items for internal or personal use, or the internal or personal use of specific clients, is granted by now Publishers Inc for users registered with the Copyright Clearance Center (CCC). The 'services' for users can be found on the internet at: www.copyright.com For those organizations that have been granted a photocopy license, a separate system of payment has been arranged. Authorization does not extend to other kinds of copying, such as that for general distribution, for advertising or promotional purposes, for creating new collective works, or for resale. In the rest of the world: Permission to photocopy must be obtained from the copyright owner. Editorial ScopeFoundations and Trends R in Microeconomics will publish survey and tutorial articles in the following topics:• Environmental Economics • Contingent Valuation• Environmental Health Risks• Climate Change• Endangered Species• Market-based Policy Instruments• Health Economics • Moral Hazard• Medical Care Markets • Medical Malpractice• Insurance economics• Industrial Organization• Theory of the Firm • Regulatory Economics• Market Structure • Auctions• Monopolies and Antitrust • Transaction Cost Economics• Labor Economics• Labor Supply• Labor Demand• Labor Market Institutions• Search Theory• Wage Structure• Income Distribution• Race and Gender • Law and Economics• Models of Litigation• Crime• Torts, Contracts and Property • Constitutional Law• Public Economics• Public Goods It describes the properties of a collusive outcome in terms of the setting of price and a market allocation, monitoring of agreements with respect to price but more importantly sales, punishment methods for enforcing an agreement and also the use of buy-backs to compensate cartel members, methods for responding to external disruptions from non-cartel suppliers and handling over-zealous sales representatives, and operational procedures in terms of the frequency of meetings and the cartel's organizational structure. Information for Librarians

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“…observation by Symeonidis (2003), who finds strong evidence that collusion is more likely in industries with high capital intensity. This result has been interpreted as a consequence of high barriers to entry.…”

Section: Introductionmentioning

confidence: 96%

Optimal collusion with limited liability

Villemeur

Flochel²,

Versaevel

2013

Int J of Economic Theory

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Collusion sustainability depends on firms' aptitude to impose sufficiently severe punishments in case of deviation from the collusive rule. We extend results from the literature on optimal collusion by investigating the role of limited liability. We examine all situations in which either structural conditions (demand and technology), financial considerations (a profitability target), or institutional circumstances (a regulation) set a lower bound, possibly negative, to firms' profits. For a large class of repeated games with discounting, we show that, absent participation and limited liability constraints, there exists a unique optimal penal code. It commands a severe single-period punishment immediately after a firm deviates from the collusive stage-game strategy. When either the participation constraint or the limited liability constraint bind, there exists an infinity of multi-period punishment paths that permit firms to implement the optimal collusive strategy. The usual front-loading scheme is only a specific case and an optimal punishment profile can take the form of a price asymmetric cycle. We characterize the situations in which a longer punishment does not perform as a perfect substitute for more immediate severity. In this case the lowest discount factor that permits collusion is strictly higher than without the limited liability constraint, which hinders collusion.

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In Which Industries is Collusion More Likely? Evidence from the UK

Cited by 59 publications

References 24 publications

The Effect of Competition on Wages and Productivity: Evidence from the United Kingdom

The Effect of Competition on Wages and Productivity: Evidence from the United Kingdom

How Do Cartels Operate?

Optimal collusion with limited liability

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