Score contribution per author:
α: calibrated so average coauthorship-adjusted count equals average raw count
How many cartels are there, and how long do they live? The answers to these questions are important in assessing the need for competition policy. We present a Hidden Markov Model that takes into account that often it is not known whether a cartel exists or not. We take the model to data from a period of legal cartels—Finnish manufacturing industries 1951–1990. Our estimates suggest that once born, cartels are persistent; by the end of the period, almost all industries were cartelized.