Effectively fighting cartels requires that cartels be discovered. Economic theory gives some behavioral patterns that are indicative of collusion and allow the distinction between collusion and competition, and can serve to screen industries to determine whether they are worthy of more intense investigation. This paper focuses on market shares as an indicator of collusive behavior. The paper discusses the interrelationship between collusion and competition and the stability of market shares. Thereby it demonstrates the problems of collecting data of real market shares, and gives a solution for empirical analysis of the market share volatility (MV). MV measures the change of market shares between all the firms in an industry in a particular year, and can thus work as a collusive marker. The paper empirically analyzes whether MV is significantly different in a cartel than in competition. Reasons for higher instability of cartels, which try to establish a system of changing market shares to fool the authority, are also discussed.
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