Testing post-cartel pricing during litigation

Harrington (2004) shows that conspirators can have incentives to maintain high prices after the cartel's discovery to reduce damages they are likely to pay. We exploit the existence of a discovered retail gasoline price-fixing cartel in the province of Quebec to test this theory. The empirical results provide some support for Harrington (2004)'s predictions.

► The title was changed to Testing Post-Cartel Pricing During Litigation. ►Manipulated price was replaced by strategic price. ► The difference between residual collusion and strategic pricing is clear. ► The Connor and Bolotova (2006) reference was added and discussed. ► The assumption that antitrust sanctions are based on economic harm is made explicit.