Empirical Evidence for Collusion in the U.S. Auto Market?

39 Pages Posted: 12 Apr 2004 Last revised: 20 Apr 2022

See all articles by Val E. Lambson

Val E. Lambson

Brigham Young University - Department of Economics

J. David Richardson

Syracuse University; National Bureau of Economic Research (NBER)

Date Written: June 1992

Abstract

A supergame theoretic price-setting model of collusion is calibrated to data from the North American passenger car market before, during, and after the voluntary restraint arrangements (VRAs) with Japan. Conclusions about whether the model is consistent with the bans from the various regimes depend on assumptions about market structure, demand elasticities, and discount factors. If one believes that the price elasticity of auto demand is about one, for example, then the calibrations suggest that in, the pre-VRA and VRA regimes, only General Motors and Ford could conceivably have colluded, and even this limited potential broke down in the post-VRA regime.

Suggested Citation

Lambson, Val Eugene and Richardson, J. David, Empirical Evidence for Collusion in the U.S. Auto Market? (June 1992). NBER Working Paper No. w4111, Available at SSRN: https://ssrn.com/abstract=297334

Val Eugene Lambson (Contact Author)

Brigham Young University - Department of Economics ( email )

130 Faculty Office Bldg.
Provo, UT 84602-2363
United States
801-378-7765 (Phone)

J. David Richardson

Syracuse University ( email )

900 S. Crouse Avenue
The Maxwell School of Citizenship and Public Affairs 347 Eggers Hall
Syracuse, NY 13244
United States
315-443-4339 (Phone)
315-443-9085 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
36
Abstract Views
789
PlumX Metrics