Review of Industrial Organization

, Volume 44, Issue 4, pp 423–441 | Cite as

The Impacts of an Antitrust Investigation: A Case Study in Agriculture

Article

Abstract

We analyze the impacts of an antitrust investigation on the purchasing practices of a buying collaboration and its common bidding agent. Using a repeated cross section of prices across procurement auctions that were and were not subjected to the investigation, we find that auction prices in the targeted auctions: (i) significantly increased as soon as the targets were made aware they were under investigation; (ii) remained higher as long as the investigation was open; and (iii) systematically declined to the same low pre-knowledge state after the closure of the investigation without prosecution. Finally, the counterfactual impact on auction prices by the removal of the common bidding agent and the demise of the buying collaboration at a later date was on par with the impacts of the investigation.

Keywords

Antitrust investigation Auction Buying collaboration  Common bidding agent Collusion GIPSA 

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Copyright information

© Springer Science+Business Media New York 2013

Authors and Affiliations

  1. 1.Department of Agricultural EconomicsMississippi State UniversityStarkvilleUSA
  2. 2.Department of Agricultural EconomicsMississippi State UniversityStarkvilleUSA

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