THEORIES OF CARTEL STABILITY AND THE JOINT EXECUTIVE-COMMITTEE

This article reexamines the experience of the Joint Executive Committe e, an 1880s railroad cartel, to assess the applicability of the Green and Porter (1984) and Rotemberg and Saloner (1986) theories of price w ars. After discussing necessary modifications to the theories, I estim ate a number of dynamic models to explore the causes of price wars, th e cyclical nature of pricing, and the possibility that secret price cu ts may have been given. The estimates provide some support for the pre dictions of the first theory.