Competition and industries prone to endemic collusion
Serial offenders: Why some industries seem prone to endemic collusionThis full-day session looked at some sectors where endemic collusion is found and at the extent to which recidivism varies across sectors. It focussed on the following sectors: chemicals; construction services, including public tenders; cement and concrete; and food products. Economic theory has developed well-established guidelines on the factors that are considered conducive to collusion and could therefore help explain endemic collusion. These factors include market concentration, high entry barriers, a high ratio of fixed costs to variable costs, market transparency and frequent interaction among competitors that facilitate information sharing. Repeated collusion by the same companies could also have other explanations, such as the interplay between firm-specific factors and sector-specific factors. For instance there could be hysteresis effects: once cartels do form (perhaps because of sectoral characteristics), collusion becomes more accepted in the sector, so that cartels become more likely to form again, even after antitrust action. Building on these factors, the session covered the (structural) characteristics of the four sectors and the reasons why (and if) serial collusion appears in these industries. The session provided an opportunity to share experiences and discuss implications in terms of enforcement tools and priorities for competition authorities. |
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SEE ALSO Fighting corruption and promoting competition Guidelines for fighting bid rigging in public procurement Collusion and corruption in public procurement (2011, pdf) |
GLOBAL FORUM SESSION DOCUMENTATIONCall for contributions | Appel à contributions Summary document: Detailed summary of the discussion | Compte rendu détaillé de la discussion Background Note by Secretariat: English | Français
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Contributions from participants |
Panellists, related papers and presentations |
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Greece PPT |
Joseph HARRINGTON, Jr. (Professor of Business Economics and Public Policy, The Wharton School, University of Pennsylvania) presentingThoughts on why certain markets are more susceptible to collusion and some policy suggestions for dealing with them ENG|FRA| PPT Robert C. MARSHALL (Distinguished Professor of Economics, Penn University) presenting Participation in multiple cartels through time ENG | FRA | PPT Robert WILSON (partner in the Competition Practice at Webber Wentzel) presenting Endemic collusion in the South African construction industry: reasons & implications ENG | FRA | PPT Valerie SUSLOW (Professor, Vice Dean for Faculty and Research, Johns Hopkins Carey Business School) presenting Serial collusion in context: Repeat offenses by firm or by industry? ENG | FRA | PPT |
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