MARKET POWER AND COLLUSION IN THE OCEAN SHIPPING INDUSTRY: IS A BIGGER CARTEL A BETTER CARTEL?

MARKET POWER AND COLLUSION IN THE OCEAN SHIPPING INDUSTRY: IS A BIGGER CARTEL A BETTER CARTEL? The regulatory structure of the ocean shipping industry allows carriers to enter into joint pricing agreements (conference agreements) that are free from antitrust scrutiny, and requires freight rates to be published and policed by a government agency. We test whether this regulatory structure leads to the exercise of market power, and identify whether that market power resides with conferences themselves or requires the participation of carriers outside the conference. The results suggest that liner conferences are not particularly effective cartels although some market power may exist in ocean shipping. Market concentration may be a contributing factor to this market power. (JEL L12, L43, L92, K21) http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Economic Inquiry Wiley

MARKET POWER AND COLLUSION IN THE OCEAN SHIPPING INDUSTRY: IS A BIGGER CARTEL A BETTER CARTEL?

Economic Inquiry, Volume 36 (2) – Apr 1, 1998

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Publisher
Wiley
Copyright
Copyright © 1998 Wiley Subscription Services, Inc., A Wiley Company
ISSN
0095-2583
eISSN
1465-7295
D.O.I.
10.1111/j.1465-7295.1998.tb01715.x
Publisher site
See Article on Publisher Site

Abstract

The regulatory structure of the ocean shipping industry allows carriers to enter into joint pricing agreements (conference agreements) that are free from antitrust scrutiny, and requires freight rates to be published and policed by a government agency. We test whether this regulatory structure leads to the exercise of market power, and identify whether that market power resides with conferences themselves or requires the participation of carriers outside the conference. The results suggest that liner conferences are not particularly effective cartels although some market power may exist in ocean shipping. Market concentration may be a contributing factor to this market power. (JEL L12, L43, L92, K21)

Journal

Economic InquiryWiley

Published: Apr 1, 1998

References

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