Networks, Cartels, and Antitrust Policy

Posted by Social Science Research Network

Networks, Cartels, and Antitrust Policy – Miguel Cuerdo Mir (Universidad Rey Juan Carlos) and Pilar Grau-Carles (Universidad Rey Juan Carlos de Madrid)

ABSTRACT: Despite multiple applications of network theory in different fields of social and legal sciences in general, the possibility of applying this theory to the economic analysis of the antitrust law and, more specifically, to the study of cartels has not yet been considered. This paper develops a set of distances, clustering and centrality measures, taken from network theory, and applies them to the specific case of a cartel sanctioned as such by the European Commission. This approach has enabled us to quantify some characteristic elements of the cartel, such as, for instance, a remarkable asymmetry between operators (nodes in the network), its different degree of influence (study of links), as well as the critical importance of some operators versus other cartelized agents, such that their elimination from the organization would not enable them to create their own cartel. This leads the authors to reconsider the antitrust policy based on leniency programmes.