Buyer resistance for cartel versus merger
Publication
, Journal Article
Kumar, V; Marshall, RC; Marx, LM; Samkharadze, L
Published in: International Journal of Industrial Organization
January 1, 2015
Abstract Procurement practices are affected by uncertainty regarding suppliers' costs, the nature of competition among suppliers, and uncertainty regarding possible collusion among suppliers. Buyers dissatisfied with bids of incumbent suppliers can cancel their procurements and resolicit bids after qualifying additional suppliers. Recent cartel cases show that cartels devote considerable attention to avoiding such resistance from buyers. We show that in a procurement setting with the potential for buyer resistance, the payoff to firms from forming a cartel exceeds that from merging. Thus, firms considering a merger may have an incentive to collude instead. We discuss implications for antitrust and merger policy.
Duke Scholars
Published In
International Journal of Industrial Organization
DOI
ISSN
0167-7187
Publication Date
January 1, 2015
Volume
39
Start / End Page
71 / 80
Related Subject Headings
- Economics
- 3803 Economic theory
- 3801 Applied economics
- 3507 Strategy, management and organisational behaviour
- 1403 Econometrics
- 1402 Applied Economics
- 1401 Economic Theory
Citation
APA
Chicago
ICMJE
MLA
NLM
Kumar, V., Marshall, R. C., Marx, L. M., & Samkharadze, L. (2015). Buyer resistance for cartel versus merger. International Journal of Industrial Organization, 39, 71–80. https://doi.org/10.1016/j.ijindorg.2015.02.002
Kumar, V., R. C. Marshall, L. M. Marx, and L. Samkharadze. “Buyer resistance for cartel versus merger.” International Journal of Industrial Organization 39 (January 1, 2015): 71–80. https://doi.org/10.1016/j.ijindorg.2015.02.002.
Kumar V, Marshall RC, Marx LM, Samkharadze L. Buyer resistance for cartel versus merger. International Journal of Industrial Organization. 2015 Jan 1;39:71–80.
Kumar, V., et al. “Buyer resistance for cartel versus merger.” International Journal of Industrial Organization, vol. 39, Jan. 2015, pp. 71–80. Scopus, doi:10.1016/j.ijindorg.2015.02.002.
Kumar V, Marshall RC, Marx LM, Samkharadze L. Buyer resistance for cartel versus merger. International Journal of Industrial Organization. 2015 Jan 1;39:71–80.
Published In
International Journal of Industrial Organization
DOI
ISSN
0167-7187
Publication Date
January 1, 2015
Volume
39
Start / End Page
71 / 80
Related Subject Headings
- Economics
- 3803 Economic theory
- 3801 Applied economics
- 3507 Strategy, management and organisational behaviour
- 1403 Econometrics
- 1402 Applied Economics
- 1401 Economic Theory