When are Cartels more likely to be formed or broken? The role of business cycles

The literature presents mixed contributions about the economic conditions under which cartels form and collapse, and about how stable they are across firm-specific and industry-wide business cycles. The relationship between cartel life cycles and business cycles has not been sufficiently analyzed to date. In this paper, we study in depth whether collusion is pro-cyclical or counter-cyclical. We analyze the relationship between cartel startups/breakups and economic cycles using a dataset of sanctioned cartels by the European Commission that were active between 1997 and 2012, after the leniency program had already been introduced. We also double check whether this relationship has changed with respect to the pre-leniency period from 1991 to 1996. Our results show that cartels are more likely to be formed in upturns, but that cartels tend to breakup also in booms. Upturns in economic cycles appear to cause cartel turnovers: existing cartels die while new ones are set up. Collusion appears to be pro-cyclical with respect to cartel creation, while it seems to be counter-cyclical with regard to cartel demise

Cartel destabilization effect of leniency programs

This paper investigates the theoretically and empirically unsettled question of the effect of the leniency programs on cartel duration, cartel fines and the length of the investigation. The fact that leniency programs were implemented in two different jurisdictions (EU and Spain) at different moments of time, and the exogeneity of the date of introduction, allow us to identify and quantify the effect of the programs on the outcomes using difference-in-difference program evaluation techniques. We empirically show that leniency programs destabilize existing cartels in the short run as expected from theory and previous empirical papers, and then dissuade the creation of new cartels in the long run. Deterrence effects dominate empirically in the long run, although theoretically they might not dominate, and previous empirical findings were inconclusive. Fines per firm increase substantially after the introduction of the leniency policy, despite whistleblowing firms are partially or totally exempted from fines. The duration of the investigation increases with the introduction of the leniency programs. Leniency programs have sharp and clear short-run cartel destabilization and long-run cartel dissuasion effects

Managers' expectations, business cycles and cartels' life cycle

The literature presents mixed findings regarding the economic conditions under which cartels form and collapse, and regarding how stable they are across firm-specific and industry-wide business cycles. The relationship between cartel life cycles and business cycles has been insufficiently analyzed to date. In this paper, we study in depth whether collusion is pro-cyclical or counter-cyclical. We analyze the relationship between cartel start-ups/break ups and economic cycles using a dataset of sanctioned cartels by the European Commission (EC) that were active between 1997 and 2018, after the leniency program had already been introduced. We also double check whether this relationship has changed with respect to the pre-leniency period from 1991 to 1996. Our results show that cartels are more likely to be formed when the business has evolved positively in the previous months, and cartels are less likely to collapse when the business has evolved positively, and managers expect prices to decline. The EC's sanctioning activity has been an effective deterrent and has had a destabilizing effect on cartels. However we found no evidence that managers' expectations on prices affect cartel formation. All these results are an important issue for anti-cartel policy enforcement since knowing when cartels are more prone or less likely to occur would help authorities prevent their formation or their early detection

25 years of leniency programs: a turning point in cartel prosecution

This contribution reviews what we know about the effectiveness of leniency or amnesty programs in cartel prosecutions. Leniency programs have gradually been adopted by as many as 53 competition policy jurisdictions around the globe during the last 25 years. We show that the available evidence supports that the leniency programs have had a strong impact on anti-cartel policy design and effectiveness. (...

Gestión del conocimiento. Perspectiva multidisciplinaria. Volumen 17

El libro “Gestión del Conocimiento. Perspectiva Multidisciplinaria”, Volumen 17 de la Colección Unión Global, es resultado de investigaciones. Los capítulos del libro, son resultados de investigaciones desarrolladas por sus autores. El libro es una publicación internacional, seriada, continua, arbitrada, de acceso abierto a todas las áreas del conocimiento, orientada a contribuir con procesos de gestión del conocimiento científico, tecnológico y humanístico. Con esta colección, se aspira contribuir con el cultivo, la comprensión, la recopilación y la apropiación social del conocimiento en cuanto a patrimonio intangible de la humanidad, con el propósito de hacer aportes con la transformación de las relaciones socioculturales que sustentan la construcción social de los saberes y su reconocimiento como bien público

Análisis de las tarifas de abastecimiento doméstico de agua en la provincia de Málaga: una aproximación

This work presents an analysis of the rates of supply of water in the most representative municipalities in the province of Málaga between 1989-1998, period in which the biggest number of privatizations takes place in the administration of the service to the entities of the selected sample. In order to carry out the study of the evolution of the rates we selected three types of representative families of a consumption level low, medium and high, and we examined the most significant economic effects. In the section with respect to the redistributional aspects of the rates, by means of a simple analytic position, the progressivity of the different rates is studied. Finally, starting from the rates of the year 1998 and adding a fourth type of representative family of a level of high consumption, we proceed to quantify and to compare the consumer's surplus. The work closes with final considerations.Este trabajo presenta un análisis de las tarifas de abastecimiento de agua en los municipios más representativos de la provincia de Málaga entre 1989-1998, periodo en el que se produce el mayor número de privatizaciones en la gestión del servicio de los entes de la muestra seleccionada. Para realizar el estudio de la evolución de las tarifas seleccionamos tres tipos de familias representativas de un nivel de consumo bajo, medio y alto, y examinamos los efectos económicos más significativos. En el apartado referente a los aspectos redistributivos de las tarifas, mediante un sencillo planteamiento analítico, se estudia la progresividad de las mismas. Finalmente, a partir de las tarifas del año 1998 y añadiendo un cuarto tipo de familia representativa de un nivel de consumo elevado, procedemos a cuantificar y comparar el excedente del consumidor. El trabajo se cierra con unas consideraciones finales

Los tributos cedidos a las Comunidades Autónomas: dinámica de la capacidad normativa en el periodo 1997-2006

This paper describes how the Spanish Autonomous Communities have made use of their legislative discretion, from 1997 on, in relation with the Central Government ceded taxes. Our aim is to point out the main mechanisms employed by regional governments in order to exercise this legislative ability, so as to identify performance patterns.Este trabajo describe cómo han utilizado las Comunidades Autónomas españolas su capacidad normativa sobre los tributos estatales cedidos a partir del momento en que se les atribuyó esta potestad; el año 1997. Nuestro objetivo es señalar las vías más utilizadas por parte de las administraciones autonómicas a la hora de ejercitar esta capacidad tributaria para, finalmente, tratar de identificar patrones de actuación