Research

Working Paper

When Wholesalers Join the Cartel: Prices, Markups, and Rent Sharing

Abstract: This paper studies how upstream participation affects the consequences of collusion in retail markets. Using eight gasoline cartel cases in Brazil and a matching difference-in-differences design, I show that vertical cartels generate substantially larger increases in retail prices and retail markups than horizontal cartels, with weaker evidence for wholesale markups. I find that small retailers receive smaller retail-markup gains under vertical coordination. Combining these results with documentary evidence from antitrust cases, I develop a model in which discriminatory wholesale terms weaken retailers’ incentives to remain outside the cartel, induce broader downstream participation, and allow vertical cartels to sustain higher retail prices.

Latest Draft: [PDF] [Slides] [Online Appendix]

Works in Progress

How the State Bids: Government Participation and Pricing in First-Price Procurement Auctions

Managing Long-Run Competition: Evidence from Sao Paulo Pharmaceutical Procurement

with Karam Kang and Anh H. Nguyen.