Testing price-fixing agreements in a multimarket context: The European case of vitamin C

2007

In this paper, we suggest a method to test price-fixing agreements. Prices fixed to multiple shipments are decomposed into a set of destination market effects and time effects in order to allow us to perform an analysis of residuals. We examine the pricing behavior of vitamin C in the European destination markets of German exports. We explore two different periods: January 1991–August 1995 and September 1995–September 2001. Empirical results on the first period, which are consistent with our knowledge obtained from firms’ confessions about illegal agreements, contrast notably with those obtained on the more recent period.