Hidden collusion by decentralization: firm organization and antitrust policy

Emilie Dargaud (1) , Armel Jacques (2)

1 GATE Lyon Saint-Étienne - Groupe d'Analyse et de Théorie Economique Lyon - Saint-Etienne
2 CEMOI - Centre d'Économie et de Management de l'Océan Indien

This paper develops a theory of the centralization of firms engaged in multi-market collusive agreements. A centralized organization (called the unitary or U-form) allows price coordination across several markets, whereas with decentralized (the multidivisional or M-form) firms the probability that the antitrust authority will find evidence of collusion on one market while investigating the other is lower. We show that the firm’s choice of internal structure depends to a large extent on product substitutability and the instruments used by the antitrust authority.

Mots clés: R & D/Technology Policy; Antitrust policy; Collusion; Economics general; Economic Theory; International Economics; M-form; Microeconomics; Organizational design; U-form

Domaines: Economies et finances

Emilie Dargaud, Armel Jacques. Hidden collusion by decentralization: firm organization and antitrust policy. Journal of Economics, 2015, 114 (2), pp.153-176. ⟨10.1007/s00712-013-0386-9⟩. ⟨hal-01450833⟩