What Can the Duration of Discovered Cartels Tell Us About the Duration of All Cartels?

Joseph E. Harrington, Yanhao Wei
<span title="2017-02-22">2017</span> <i title="Wiley"> <a target="_blank" rel="noopener" href="https://fatcat.wiki/container/6tnyvyze5rf23pdcm2b4lqxdpu" style="color: black;">Economic Journal</a> </i> &nbsp;
Estimates of average cartel duration and the annual probability of cartel death are based on data for discovered cartels. It is recognized that these estimates could be biased because the population of discovered cartels may not be a representative sample of the latent population of cartels. This paper constructs a birth-death-discovery process to investigate the source and direction of possible biases. Bayesian inference is used to provide bounds on the extent of the bias and deliver an
more &raquo; ... d set of beliefs on the probability of cartel death. It is well understood that cartels are socially harmful. What is far less clear is the magnitude of this harm. The seriousness of the cartel problem in an economy depends on: 1) how many cartels there are; 2) how large is the overcharge (and the elasticity of market demand); and 3) how long cartels last. Currently, what we know about these issues comes from cartels which, to their disappointment, were discovered and convicted. Other than that the number of discovered cartels is a lower bound on the number of cartels, we know little about how many cartels there are. 1 On the issue of the overcharge, there is a fair amount of work estimating
<span class="external-identifiers"> <a target="_blank" rel="external noopener noreferrer" href="https://doi.org/10.1111/ecoj.12359">doi:10.1111/ecoj.12359</a> <a target="_blank" rel="external noopener" href="https://fatcat.wiki/release/h4g4f6iih5aazchjlxwr4rsibm">fatcat:h4g4f6iih5aazchjlxwr4rsibm</a> </span>
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