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Buyer Cartels: A Theoretical and Policy Framework

BY | June 29, 2021

This paper contains a theoretical analysis cartel formation by buyers in thin markets where with a small number of buyers and sellers. Limiting the impact of buyer cartels depends critically…

This paper contains a theoretical analysis cartel formation by buyers in thin markets where with a small number of buyers and sellers. Limiting the impact of buyer cartels depends critically on whether such a cartel can create barriers to entry to exclude non-cartel members from the trading process. In addition, for a buyer’s cartel to exist, cartel members need to be able to make side payments to each other which do not go through markets but are made directly each other. Allowing for bilater

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