Price-Fixing Hits Home: An Empirical Study of U.S. Price Fixing Conspiracies
36 Pages Posted: 17 Nov 2015
Date Written: November 2015
This paper analyzes all Section 1, Sherman Act price fixing cases brought by the U.S. Department of Justice between 1961 and 2013. Over 500 cartels were prosecuted during this period. The determinants of cartel formation and cartel breakup are estimated, including analysis of the impact of the discount rate, business cycles, and antitrust policy. We find that cartels are more likely to breakup during periods of high real interest rates, presumably because higher interest rates are associated with greater impatience. The adoption of a stronger amnesty policy has no significant impact on cartel breakup over this period, although the results suggest some association with lower cartel formation rates.
Keywords: cartel duration, cartel formation, leniency, antitrust, competition policy
JEL Classification: D34, L13, L41
Suggested Citation: Suggested Citation