Collusion in Ocean Shipping: A Test of Monopoly and Empty Core Models
In markets with avoidable fixed costs, the core may be empty. I argue that a reason for collusion is to impose an equilibrium where none exists. I set up a framework for deriving testable implications from the model and compare those implications with those of a cartel model. I compare the two model...
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Veröffentlicht in: | The Journal of political economy 1989-10, Vol.97 (5), p.1160-1179 |
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Format: | Artikel |
Sprache: | eng |
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Online-Zugang: | Volltext |
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Zusammenfassung: | In markets with avoidable fixed costs, the core may be empty. I argue that a reason for collusion is to impose an equilibrium where none exists. I set up a framework for deriving testable implications from the model and compare those implications with those of a cartel model. I compare the two models empirically with data from liner shipping conferences, legal collusive agreements that have been in force for over a century, and I conclude that the evidence supports the theory of the core. |
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ISSN: | 0022-3808 1537-534X |
DOI: | 10.1086/261647 |