Semicollusion in the Norwegian cement market

A model of semicollusion, where firms collude on prices and compete on capa cities, is tailor-made to the characteristics of the Norwegian cement marke t and tested on this particular market for the period 1927-1982. The result s indicate that the rapid increase in capacity and thereby in exports in th e period 1956-1967, the late phase of the price cartel, best can be explain ed by the market-sharing agreement: each firm overinvested in capacity to r eceive a large quota in the domestic market. (C) 1999 Elsevier Science B.V. All rights reserved. JEL classification: C22; D43; L13; L61; N64.