Is all cartel activity evil?

Torre, Andrew and Morgan, Daniel 2010, Is all cartel activity evil?, Economic papers, vol. 29, no. 4, pp. 432-445, doi: 10.1111/j.1759-3441.2010.00089.x.

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Title Is all cartel activity evil?
Author(s) Torre, AndrewORCID iD for Torre, Andrew
Morgan, Daniel
Journal name Economic papers
Volume number 29
Issue number 4
Start page 432
End page 445
Total pages 14
Publisher Wiley-Blackwell Publishing Asia
Place of publication Richmond, Vic.
Publication date 2010-12
ISSN 0812-0439
Keyword(s) cartels
externalised cost
social welfare
cartel authorisations
Summary The new Australian cartel laws prohibit a provision of a contract, arrangement or understanding that inter alia, results in price fixing and output restriction between competitors in the relevant market. This is subject to a recognition that sometimes such conduct can be in the public interest, in which case the Australian Competition and Consumer Commission (ACCC) may grant an authorisation. One such instance may be an activity characterised by substantial externalised cost. An authorisation application would need to provide suitable evidence in support of the underlying case being argued. Traditionally in Australia, such evidence has been qualitative in nature; however, where possible, the ACCC and its counterparts in the EU and New Zealand encourage quantitative estimates. This is a case study of the welfare impact of output restrictions in the Australian beer industry, which is a source of substantial negative externalities. A standard simulation exercise is utilised as an example of how applicants and the competition regulator might combine theoretical and quantitative concepts to better achieve the objectives of the new legislation.
Notes Article first published online 6 Feb 2011
Language eng
DOI 10.1111/j.1759-3441.2010.00089.x
Field of Research 140299 Applied Economics not elsewhere classified
Socio Economic Objective 910299 Microeconomics not elsewhere classified
HERDC Research category C1 Refereed article in a scholarly journal
Copyright notice ©2011, The Economic Society of Australia
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