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The Sociology of Cartels

Author

Listed:
  • Justus Haucap
  • Christina Heldman
Abstract
Traditional economic theory of collusion assumed that cartels are inherently unstable, and yet some manage to operate for years or even decades. While the literature has presented several determinants of cartel stability, the vast majority focuses on firms as entities, even though cartels are typically formed between individuals who need to develop structures that allow them to establish trust and ensure cooperation. We analyze 15 German cartels, focusing on the individual participants, the communication and internal structures within the cartels as well as their breakup. Our results indicate that cartel members are highly homogeneous and often rely on existing networks within the industry. Most impressively, only two of the 156 individuals involved in these 15 cartels were female, suggesting that gender also plays a role for cartel formation. We further identify various forms of communication and divisions of responsibilities and show that leniency programs are a powerful tool in breaking up cartels. Based on these results we discuss implications for competition policy and further research.

Suggested Citation

  • Justus Haucap & Christina Heldman, 2022. "The Sociology of Cartels," CESifo Working Paper Series 9914, CESifo.
    • Handle: RePEc:ces:ceswps:_9914
    as

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    File URL: https://www.cesifo.org/DocDL/cesifo1_wp9914.pdf
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    References listed on IDEAS

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    Cited by:

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    2. Carmen García & Joan-Ramon Borrell & Juan Luis Jiménez & José Manuel Ordóñez-de-Haro, 2024. "Cartels, board gender composition and gender quotas," European Journal of Law and Economics, Springer, vol. 58(2), pages 283-320, October.

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    More about this item

    Keywords

    cartels; collusion; social networks; trust; antitrust;
    All these keywords.

    JEL classification:

    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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