NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Vertical Restraints in the Bromine Cartel: The Role of Distributors in Facilitating Collusion

Margaret Levenstein

NBER Historical Working Paper No. 49
Issued in July 1993
NBER Program(s):   DAE   IO

From 1885 to 1902 manufacturers and distributors in the American bromine industry cooperated to increase prices and profits. Like many sectors of the American economy at the time, the bromine industry was made up a large number of small manufacturers and a small number of national distributors. The manufacturers agreed to pool their output and sell only to two distributors. The distributors accumulated excess inventories rather than let the market price fall, but then used those inventories as a threat to deter cheating and new entry. Industry participants designed contracts to balance fluctuations in the costs and benefits from cheating. These contracts succeeded in stabilizing collusion until the entry of new, vertically integrated, mass production firm led to its demise.

download in pdf format
   (1382 K)

download in djvu format
   (225 K)

email paper

This paper is available as PDF (1382 K) or DjVu (225 K) (Download viewer) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/h0049

Users who downloaded this paper also downloaded these:
Scott Morton w5663 Entry and Predation: British Shipping Cartels 1879-1929
Costa h0055 Agricultural Decline and the Secular Rise in Male Retirement Rates
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us