Enter the Research Conversation with Delina Agnosteva
How do international cartels impact trade and why does research on them matter?
Imagine that a firm from the United States and another from Canada engage in secret talks and come up with a strategy to simultaneously raise the price of their product. Suppose that these firms make up a large share of the global market for their product. Now, how does the presence of this cartel affect trade between the US and Canada in this particular sector? Further, what if both of these firms also export to Mexico? How does access to a third market matter for the stability of their cartel agreement, output allocations, trade volumes and welfare? How does that affect consumers in each country?
Now, suppose that instead of each firm producing a single good, they each produce two products at different costs. Now, how does collusion in multiple goods compare relative to competition in terms of output, trade volumes and welfare in each country? Could collusion in such a setting lead to higher trade volumes and higher welfare?
The answers to the questions I investigate matter for antitrust authorities and policy makers. In the real world, antitrust authorities determine the severity of the sanctions for cartel members based on the affected sales. Therefore, providing them with more information on the impact of collusion on trade volumes and trade values would be useful for establishing a more precise determination of the fines and other punishment for the abuse of market power by international cartels.
PhD Alum, Assistant Professor of Economics at Towson University
Area of Research
Impact of international cartels on trade
I love traveling, reading and baking. I also have 10 orchids at home.