Motivating Collusion

Sangeun Ha, Fangyuan Ma, Alminas Žaldokas

Publikation: Working paperForskning


We examine how executive compensation can be designed to motivate product market collusion. We look at the 2013 decision to close several regional offices of the Department of Justice, which lowered antitrust enforcement for firms located near these closed offices. We argue that this made collusion more appealing to the shareholders, and find that these firms increased the sensitivity of executive pay to local rivals' performance, consistent with rewarding the managers for colluding with them. The affected CEOs were also granted more equity compensation, which provides long-term incentives that could foster collusive arrangements.
UdgivelsesstedHong Kong
UdgiverThe Hong Kong University of Science and Technology
Antal sider76
StatusUdgivet - 2022
NavnHKUST Business School Research Paper


  • Product market collusion
  • Corporate governance
  • Managerial compensation