Show Summary Details

Page of

PRINTED FROM OXFORD HANDBOOKS ONLINE ( © Oxford University Press, 2022. All Rights Reserved. Under the terms of the licence agreement, an individual user may print out a PDF of a single chapter of a title in Oxford Handbooks Online for personal use (for details see Privacy Policy and Legal Notice).

date: 28 June 2022

Abstract and Keywords

Cartels occur in a wide range of products and industries and engage in a range of behaviors in their efforts to increase profits. This chapter discusses the variety of techniques that cartels use to set prices. They may agree to a minimum price, target prices, or specific increases (or even decreases). The timing of price announcements may be intentionally manipulated to disguise collusive activity. Cartels engage in specific behaviors that facilitate monitoring of one another’s pricing. Successful collusion thus requires extensive communication, both via private and public signals. The most important determinant of cartel breakup is effective antitrust policy. Theory suggests that cartels break up as a result of cheating by member firms tempted by short-term profits, but empirical analysis rarely finds cheating that destroys cartels. Neither cartel breakup nor cartel formation appears highly correlated with the business cycle.

Keywords: cartels, collusion, pricing, business cycles, communication

Access to the complete content on Oxford Handbooks Online requires a subscription or purchase. Public users are able to search the site and view the abstracts and keywords for each book and chapter without a subscription.

Please subscribe or login to access full text content.

If you have purchased a print title that contains an access token, please see the token for information about how to register your code.

For questions on access or troubleshooting, please check our FAQs, and if you can''t find the answer there, please contact us.