We investigate the effect of a vertical merger on downstream firms' ability to collude in a repeated game framework. We show that a vertical merger has two main effects. On the one hand, it increases the total collusive profits, increasing the stakes of collusion. On the other hand, it creates...

We consider a vertically related industry and analyze how the total harm due to a price increase upstream is distributed over downstream firms and final consumers. For this purpose, we develop a general model without making specific assumptions regarding demand, costs, or the mode of...

Legal actions by direct and indirect purchasers to recover damages as a result of price-fixing by suppliers have been common in the United States for many years and are now beginning in a number of other countries including Australia and Canada. This paper argues that traditional measures of...

We investigate the possibility for two vertically related firms to at least partially collude on the wholesale price over an infinite horizon to mitigate or eliminate the effects of double marginalisation, thereby avoiding contracts which might not be enforceable. We characterise alternative...

We examine whether agency contracts, more than traditional wholesale contracts, facilitate collusion among upstream manufacturers. We develop an infinitely repeated game with a monopoly platform and multiple manufacturers, and show that the agency contract does not facilitate upstream collusion....

Deterring the formation or continuation of cartels is a major objective of antitrust policy. We develop a dynamic framework to characterize the compensation and deterrence properties of fines, based on the fact that cartel stability depends on the ability to prevent deviation, which itself...

Corrigendum to “Are cartel fines optimal? Theory and evidence from the European Union.” The paper “Are cartel fines optimal? Theory and evidence from the European Union” can be found at 'http://ssrn.com/abstract=2342180' http://ssrn.com/abstract=2342180

The aim of this article is to explore the most recent appeals concerning illegal cartels under Article 101 TFEU by revealing the relevant principles underpinning both the substantive and the procedural review of price-fixing agreements. Arguments advancing a perceived ‘criminalisation' of the...

In The Antitrust Paradox, Robert Bork discusses policy responses to naked and ancillary price fixing as well as vertical restraints. Empirical research finds that vertical restraints are generally welfare-enhancing. We examine cartels that used vertical restraints to support collusion. We find...

Retailers may enjoy stable cartel rents in their output market through the formation of a buyer group in their input market. A buyer group allows retailers to credibly commit to increased input prices, which serve to reduce combined final output to the monopoly level; increased input costs are...