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Title: Membership, stability and internal institutions in European cartels
Author: Havell, Richard
ISNI:       0000 0004 6350 9445
Awarding Body: University of East Anglia
Current Institution: University of East Anglia
Date of Award: 2015
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The first topic this thesis examines is that of firms which enter and leave cartels without affecting the existence of the cartel. The first chapter predicts which firms in markets will choose to join and leave cartels. The findings align with a group of theoretical models identified in the literature review, indicating that cartel membership is explained by firms' individual preferences for collusion, which are consistent over time. The firms most likely to join and leave cartels are small firms in large cartels. The second chapter questions what effect this behaviour by firms has on the survivability of cartels. Theory is ambiguous on this, since entry and exit by firms could signal poor discipline among cartelists which prevents the cartel from raising prices substantially due to undercutting by outsiders or it could signal a structurally stable cartel which marginal firms take advantage of in their membership decisions. Cartels which experienced more entry and exit by firms had a lower risk of breakdown in each period than cartels with more static membership, indicating that member firms recognise when cartels are strong and take advantage of this by constantly re-evaluating their membership decisions. The final chapter discusses a different topic: the types of agreement formed by cartels. All cartels must agree to either fix prices, restrict the output of its members, allocate exclusive territories, allocation customers, or rig bids in order to fulfil their objective of raising member profits. Many cartels engage in more than one of these practices simultaneously. Structural variables are poor at predicting the presence of agreement types in the cartels studied, but distinct strategy profiles where certain agreement types substitute for each other or complement each other are present. These strategy profiles appear to be associated with particular industries and cartels of common geographical scope.
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available