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Does Entry Remedy Collusion?
Amanda Kay Starc
Thomas G. Wollmann
National Bureau of Economic Research
其他書名
Evidence from the Generic Prescription Drug Cartel
出版
National Bureau of Economic Research
, 2022
URL
http://books.google.com.hk/books?id=iWMYzwEACAAJ&hl=&source=gbs_api
註釋
Entry represents a fundamental threat to cartels. We study the extent and effect of this behavior in the largest price-fixing case in US history, which involves generic drug manufacturing. We link information on the cartel’s internal operations to regulatory filings and market data. There is a substantial increase in entry after cartel formation but regulatory approvals delay most entrants by 2-4 years. We then estimate a structural model to simulate counterfactual equilibria. Absent entry, cartel profits would be dramatically higher. Correspondingly, reducing regulatory delays by just 1-2 years equates to consumer compensating variation of $559 million-$1.3 billion.