Citation

Discussion Paper Details

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Full Details

Title: Cartels Uncovered

Author(s): Ari Hyytinen, Frode Steen and Otto Toivanen

Publication Date: March 2010

Keyword(s): antitrust, cartel, competition, detection, Hidden Markov models, illegal, legal, leniency, policy and registry

Programme Area(s): Industrial Organization

Abstract: How many cartels are there? The answer is important in assessing the efficiency of competition policy. We present a Hidden Markov Model that answers the question, taking into account that often we do not know whether a cartel exists in an industry or not. Our model identifies key policy parameters from data generated under different competition policy regimes and may be used with time-series or panel data. We take the model to data from a period of legal cartels - Finnish manufacturing industries 1951 - 1990. Our estimates suggest that by the end of the period, almost all industries were cartelized.

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Bibliographic Reference

Hyytinen, A, Steen, F and Toivanen, O. 2010. 'Cartels Uncovered'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=7761