The Rise and Fall of Cartels with Multi-Market Colluders

Posted by Social Science Research Network

The Rise and Fall of Cartels with Multi-Market Colluders J. Zhou (Tilburg Law and Economics Center)

Abstract: The majority of cartels discovered by the European Commission (EC) over the last 30 years involved firms that engaged in collusion in more than one product. I investigate the impacts of the EC’s cartel enforcement on the hazards that firms join and leave cartels in multiple products. I estimate discrete-time recurrent event hazard models for a set of 126 multi-product colluders prosecuted between 1985 and 2014. EC investigations in a market decrease the rate at which the cartel members join new cartels and increases the rate at which they leave cartels in other markets. My results shed light on enforcement efforts against cartels and other forms of organized crime.