Collusion analysis of the Alabama liquid asphalt market

Abstract

The Alabama liquid asphalt market in the USA is examined over the period 1961-1978 for evidence of activity consistent with collusion. Some 14 conditional collusion-facilitating factors that could influence a market's tendency towards collusion, not all equally important or necessarily in agreement with every other factor, were considered. While some of these factors are controversial and can help or harm a collusion, the net balance of factors and all of the important factors and evidence pointed towards being consistent with a conspiracy. While not examined as extensively, it was also found that the circumstantial evidence in the market was also consistent with collusion. This article suggests a procedural methodology for initiation and resolution of suspected collusion for determining appropriate damages. While the precise law and damages allowed will be country-specific, the general methodology should have wide application in many countries whose laws attempt to foster and preserve competition and punish and deter monopoly acquired and maintained by acting badly, such as by colluding or exclusionary conduct.

Structure, Conduct and Performance Analysis of the South African Auto Insurance Market: 1980‐2000

“…1 1 See Delorme et al. (1999), Kamerschen and Morgan (2004) or any industrial organisation textbook such as Carlton and Perloff (2005). …”

A mnemonic for the major factors influencing the likelihood of collusion

“…Thus, it is not surprising that the carpet industry, for 2 See Kamerschen (1979, pp. 193-209), Cabral (2000), Carlton and Perloff (1999), Church and Ware (2000), Dick (1998), Kamerschen and Morgan (2004), Peppal et al (1999), Scherer and Ross (1990), . 3 Small firms are more prone to price-fixing agreements because their owners are more likely to benefit directly from price-fixing than are the managers of a large firm whose compensation is primarily a fixed salary.…”

“…8 The major reason this is true is that the cost of attaining and maintaining a collusive arrangement increases significantly as the number of firms increases and the size of firms diminishes. 9 See Kamerschen and Morgan (2004). 10 An inelastic demand would suggest that this collusion is presently not exploiting all the potential gains and not necessarily that collusion does not exist.…”