Information Exchange as a Means of Collusion: The Case of the Italian Car Insurance Market
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This paper employs an econometric methodology (the Panzar-Rosse H-statistic) to test the level of competition in the Italian car insurance market, where in 2000 the Antitrust Authority imposed a conspicuous fine on 39 companies for their anti-competitive behavior deriving from an ad hoc information exchange from 1994 onwards. Our set of results shows that during the years 1998–2003 the group of firms whose business in the motor segment exceeds 60% of total gross premiums has earned revenues as if it were under monopoly or collusive oligopoly conditions, and therefore appears to support the decision of the Antitrust Authority.
Keywordscollusion information sharing insurance market structure
JEL ClassificationG22 L13 L41
I wish to thank the participants at the 12th Global Finance Conference (Trinity College, Dublin, Ireland) and at a workshop organized by the Department of Economics and Statistics of the University of Salerno, where earlier versions of this paper were presented and discussed. I am also grateful to three anonymous referees for their valuable comments.
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