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Mass Production Conquers the Pool: Firm Organization and the Nature of Competition in the Nineteenth Century

Published online by Cambridge University Press:  03 March 2009

Margaret Levenstein
Affiliation:
Assistant Professor of Economics, University of Michigan, Ann Arbor, MI 48109-1220.

Abstract

This article uses the records of the Dow Chemical Company to analyze the role of distributors in facilitating collusion in the late nineteenth and early twentieth centuries. It compares collusion in three closely related markets: salt, bromine, and bleach. Where national distributors with well-established reputations had facilitated the entry of small producers into integrated markets, distributors could also facilitate collusion. Mass-producing entrants, like Dow, joined collusive distribution arrangements while improving their innovative production processes. In the longer run, they integrated forward to escape the output restrictions and arms-length relationship with customers imposed by collusive agreements.

Type
Articles
Copyright
Copyright © The Economic History Association 1995

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