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Economic Approach to Counteracting Cartels

Author

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  • Fornalczyk, Anna

Abstract

Horizontal agreements between competitors concerning price fixing, quotas, distribution and/or supply market share – cartels – represent the most severe form of competition law infringement. Why are these agreements subject to the highest fines and, in some countries (USA, Canada, Mexico, UK), subject to both fines as well as imprisonment? What are the economic grounds for such severe punishment? How important is an economic analysis for the results of anti-cartel proceedings considering that they are prohibited per se, that is, absolutely and unconditionally? Does growing market concentration and resulting transparency increase the significance of the economic approach to the evaluation of market effects of the behaviour of business? Which methods make it possible to differentiate cartels from competition in oligopolistic markets including economic and econometric analyses? This paper will present an answer to the aforementioned questions on the basis of literature studies, an analysis of Polish case law between 2000–2009 as well as the author’s extensive experience in the field of antitrust consultancy.

Suggested Citation

  • Fornalczyk, Anna, 2009. "Economic Approach to Counteracting Cartels," MPRA Paper 23798, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:23798
    as

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    References listed on IDEAS

    as
    1. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, December.
    2. Cabral, Luis M. B., 2000. "Introduction to Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262032864, December.
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    More about this item

    Keywords

    cartels; collusions; explicit and tacit collusions; transparent markets; relevant markets; anti-competitive agreements;
    All these keywords.

    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law

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