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Life Expectancy of International Cartels: An Empirical Analysis
Review of Industrial Organization
Vol. 9, No. 3 (June 1994), pp. 331-341
Published by: Springer
Stable URL: http://www.jstor.org/stable/41798515
Page Count: 11
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This paper quantifies the importance of the various determinants of life expectancy for international cartels active throughout this century. I explain cartels' optimal duration as a function of market structure and demand growth and estimate the associated parameters recognizing that durability cannot be negative. According to the results, increases in either market shares or cartel concentration prolong life expectancy. Faster demand growth shortens cartel durability but this effect is not reliable. I also find that growth effects are sensitive to both the period of activity and the country coverage.
Review of Industrial Organization © 1994 Springer