Economic Effects of Collusive Price Agreements

Paper Summary:

This paper attempts to discuss the economic effects of collusive price agreements from the perspective of the firms involved, other firms in the market, and society as a whole, with the main focus on the first form of collusion, cartels. A discussion of the effect of antitrust authorities follows. Part 3 explains how market structure affects collusion and concludes with a discussion of the facilitating strategies.

Introduction-Layout
1.0 Cartels
2.0 Antitrust Authorities and Fines Imposed
3.0 Market Structure and Collusive Price Agreements.
4.0 Facilitating Practices
5.0 Conclusion
Bibliography

From the Paper:

"Carlton et al. (1999) describe cartels as a group of firms that explicitly acts collectively to promote its best interests. By restricting market output and raising the market price, these firms succeed a similar profit of that of a monopoly. R. A. Posner (1976) also defines cartels as The pure collusive practice that involves cooperation between competing sellers to raise the market price above the competitive level."

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