How Do Cartels Operate?

Joseph E. Harrington

Foundations and Trends(R) in Microeconomics, 2006, vol. 2, issue 1, 1-105

Abstract: This paper distills and organizes facts about cartels from about 20 European Commission decisions over 2000–2004. It describes the properties of a collusive outcome in terms of the setting of price and a market allocation, monitoring of agreements with respect to price but more importantly sales, punishment methods for enforcing an agreement and also the use of buy-backs to compensate cartel members, methods for responding to external disruptions from non-cartel suppliers and handling over-zealous sales representatives, and operational procedures in terms of the frequency of meetings and the cartel's organizational structure.

Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:now:fntmic:0700000021

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