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Collusive Market Allocations

Iossa, Elisabetta, Loertscher, Simon, Marx, Leslie and Rey, Patrick (2020) Collusive Market Allocations. TSE Working Paper, n. 20-1084, Toulouse

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Collusive schemes by suppliers often take the form of allocating customers or
markets among cartel members. We analyze incentives for suppliers to initiate
and sustain such a collusive schemes in a repeated procurement setting. We show
that, contrary to some prevailing beliefs, staggered (versus synchronized) purchasing does not make collusion more difficult to sustain or initiate. Buyer defensive
measures include synchronized rather than staggered purchasing, first-price rather
than second-price auctions, more aggressive or secrete reserve prices, longer contract
lengths, withholding information, and avoiding observable registration procedures.
Inefficiency induced by defensive measures is an often unrecognized social cost of
collusive conduct.

Item Type: Monograph (Working Paper)
Language: English
Date: March 2020
Place of Publication: Toulouse
Uncontrolled Keywords: synchronized vs staggered purchasing, sustainability and initiation of collusion, coordinated effects
JEL Classification: D44 - Auctions
D82 - Asymmetric and Private Information
L41 - Monopolization; Horizontal Anticompetitive Practices
Divisions: TSE-R (Toulouse)
Institution: Université Toulouse 1 Capitole
Site: UT1
Date Deposited: 21 Apr 2020 14:45
Last Modified: 05 Jun 2020 08:01
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