Tuesday, June 25, 2019

From 2003: Transparency in prices increased them in the Danish concrete case

Government‐Assisted Oligopoly Coordination? A Concrete Case. Svend Albæk, Peter Møllgaard, Per B. Overgaard. The Journal of Industrial Economics, March 27 2003. https://doi.org/10.1111/1467-6451.00057

Abstract: In 1993 the Danish antitrust authority decided to gather and publish firm‐specific transactions prices for two grades of ready‐mixed concrete in three regions of Denmark. Following initial publication, average prices of reported grades increased by 15–20 percent within one year. We investigate whether this was due to a business upturn and/or capacity constraints, but argue that these seem to have little explanatory power. We conclude that a better explanation is that publication of prices allowed firms to reduce the intensity of oligopoly price competition and, hence, led to increased prices contrary to the aim of the authority.

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