What Can the Duration of Discovered Cartels Tell Us About the Duration of Cartels?

Posted by Social Science Research Network

What Can the Duration of Discovered Cartels Tell Us About the Duration of Cartels? – Joseph E. Harrington Jr (University of Pennsylvania) and Yanhao Wei (University of Pennsylvania – Department of Economics)

ABSTRACT: There are many data sets based on the population of discovered cartels and it is from this data that average cartel duration and the annual probability of cartel death are estimated. It is recognized, however, that these estimates could be biased because the population of discovered cartels may not be a representative sample of the population of cartels. This paper constructs a simple birth-death-discovery process to theoretically investigate what it is we can learn about cartels from data on discovered cartels.