Rules, Communication and Collusion: Narrative Evidence from the Sugar Institute Case / David Genesove, Wallace P. Mullin.

Format:

Book

Author/Creator:

Genesove, David.

Contributor:

National Bureau of Economic Research.

Mullin, Wallace P.

Series:

Working Paper Series (National Bureau of Economic Research) no. w8145.

NBER working paper series no. w8145

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Rules, Communication and Collusion

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2001.

Summary:

Detailed notes on weekly meetings of the sugar refining cartel show how communication helps firms collude, and so highlight the deficiencies in the current formal theory of collusion. The Sugar Institute did not fix prices or output. Prices were increased by homogenizing business practices to make price cutting more transparent. Meetings were used to interpret and adapt the agreement, coordinate on jointly profitable actions, ensure unilateral actions were not misconstrued as cheating, and determine whether cheating had occurred. In contrast to established theories, cheating did occur, but sparked only limited retaliation, partly due to the contractual relations with selling agents.

Notes:

Print version record

March 2001.