Characteristics of Collusive Firms

Abstract

DESPITE the fact that collusion among American firms has been actively prosecuted under the antitrust laws for many years, little is known about the effects of this policy. Such ignorance is partly attributable to the problems that accompany empirical investigation. It is, quite simply, difficult to isolate the effects of any mode of business conduct on observable market phenomena. A second source of ignorance is the per se illegality of collusion under the Sherman Act. Since the existence of the offensive conduct is virtually the sole issue considered by United States courts, exploration of surrounding circumstances has been minimal. This paper attempts to shed some light by examining evidence on the characteristics of collusive firms during the period 1958-67.