The deterrence of collusion by a structural remedy

•Structural remedies are examined as a penalty for collusion.•When firms are very patient, a structural remedy makes collusion unprofitable.•A structural remedy can be more deterrent than fines and damages.

As a penalty for illegal collusion, this paper shows that a structural remedy makes collusion unprofitable when collusion is most stable, and that it can be a greater deterrent than fines or damages.