Sylwester Bejger
ARTICLE

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ABSTRACT

The article is devoted to problem of detection of overt or tacit collusion equilibrium in the context of choice of the appropriate econometric method, which is determined by the amount of information that the observer possesses. As a particular method to be used we have chosen a collusion marker coherent with an equilibrium of the proper model of strategic interaction – the presence of structural disturbances in the price process variance for phases of collusion and competition. We than used a proper econometric tool, namely Markov Switching Model with switching in variance regimes in order to verify its functionality in a context of a research. We applied the model to cement industry of India in a period of 1994–2009. We have reached some promising effects in discovery of collusion and competition phases, partially confirmed by facts from functionality of the industry and by reference research.

KEYWORDS

explicit and tacit collusion, collusive equilibrium, cartel detection, cement industry, price variance, Markov switching model

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