Cartelization, Cartel Breakdown, and Price Behavior: Evidence from the German Cement Industry
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We use a unique dataset of about 340,000 market transactions from 36 smaller and larger customers of German cement producers to study the price behavior before and after the breakdown of a German cement cartel. We find that, first, while the cartel agreement was active, cartel members set higher list prices than non-cartel members; however, larger rebates granted by the cartel members led to similar transaction prices. Second, after the cartel breakdown, both cartel- and non-cartel members reduced transaction prices to a far larger extent than list prices. We build on these results and discuss implications for competition policy.
KeywordsCompetition policy Price behavior Cartels Cement List prices Rebates
JEL ClassificationL12 L21 L41 L61 K21
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