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| Author: | Morton, F. S. |
| Title: | Entry and Predation: British Shipping Cartels 1879-1929 |
| Journal: | Journal of Economics and Management Strategy
1997 : Vol. 6:4, p. 679-724 |
| Index terms: | UNITED KINGDOM SHIPPING INDUSTRY CARTELS |
| Language: | eng |
| Abstract: | I examine the outcomes of cases of entry by merchant shipping lines into established markets around the turn of the century. These established markets are completely dominated by an incumbent cartel composed of several member shipping lines. The cartel makes the decision whether or not to begin a price war against the entrant; some entrants are formally admitted to the cartel without any conflict. I use characteristics of the entrant to predict whether or not the entrant will encounter a price war conditional on entering. I find that weaker entrants are fought, where "weaker" means having fewer financial resources, less experience, smaller size, or poor trade conditions. The empirical results provide most support for the long-purse theory of predation. |
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