Identical Bids and Cartel Behavior
Volume: Volume 7, No. 1
Issue: Spring 1976
Pages: pp. 281-286
Authors: William S. Comanor and Mark A. Schankerman
Title: Identical Bids and Cartel Behavior
Abstract: Despite wide acceptance of the view that identical bids suggest the presence of a cartel agreement, there has been little analysis of the role that such bids would play. When this matter is examined, we find that except in certain extreme circumstances, identical bid arrangements are unlikely to be maintained among colluding firms where their number in an industry is small. If this conclusion is correct, the focus of past government policy on the presence of identical bids as suggesting collusive behavior in highly concentrated industries is surely misplaced.
JEL Classification
Market Structure: Industrial Organization and Corporate Strategy (6110)
Public Policy Towards Monopoly and Competition (6120)