DP2301 In Which Industries Is Collusion More Likely?

Author(s): George Symeonidis
Publication Date: November 1999
Keyword(s): Cartels, Collusion, UK Manufacturing
JEL(s): L10
Programme Areas: Industrial Organization
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=2301

This paper provides an analysis of factors facilitating or hindering collusion using data on the occurrence of price-fixing across UK manufacturing industries in the 1950s. The econometric results suggest that collusion is more likely the higher the degree of capital intensity and less likely in advertising-intensive than in low-advertising industries, while the relationship between market growth and the likelihood of collusion is non-monotonic. Less clear results are obtained with respect to R&D intensity and concentration.