It Can Be Difficult For A Cartel Agreement To Survive Because

“It was a statement from the legal auditor who stated how many square metres [Name Company] had delivered the previous year. We would manipulate that statement and present it at the meeting. We scrambled the [type of product] that was not relevant to the agreement. We would leave the total amount, but we would replace the foreclosures with the money we had previously reported. (1) The application of fines is one of the possible sanctions allowed under Dutch competition law (in accordance with Article 56 of the 1 sub MW ceiling). Since October 2007, Dutch competition law has allowed the investigation of private property and the possibility of protection of individuals (Kamersukken I 2006/07, 30 071, A). October 2007 is the starting point of the analysis to ensure the comparability of the material. January 2012 is indicated as the end date, as cases generally last several years between the first investigation and the formal sanction; all cases closed until January 2012 were registered. A third influence on incitement to fraud is the likelihood of detection and the cost of the sanction that other cartel members may impose. Orr and MacAvoy (1965) developed a model in which price information is transmitted only late, so that the price cutter makes higher gains before discovery, although gains are reduced thereafter. If the implementation takes the form of the matching of the scammer`s price decreases, the potential scammer can calculate the optimal price reduction. The current value of the gains expected by the fraud will exceed those that will remain faithful if the delay before detection is long enough. In addition to the delay, the expected yield of the price cut depends on the probability of detection, which depends on the form in which the information reaches through the market. The literature “Triggerpreis” [particularly Stigler (1964), Green and Porter (1984) and Abreu, Pearce and Stacchetti (1985)] reinforces the difficulty of collusion when prices are imperfect.

The first is the behaviour of short-term marginal costs in the vicinity of each company depending on the level of production. If the gap between marginal costs and prices is large and marginal costs for each producer continue to fall, unit profits are expected to be considerable and incentives for fraud will be enormous. “Recently, I said no five or six times; The reason I repeated “yes” to future [collusive tender] agreements was that I would also be involved in the market if they got a deal.

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