Fight against cartels and behaviour of managers

In this article, we combine the classic approach to cartels in terms of economics of crime approach with a corporate governance approach applied to collusion. It leads us to study in particular the motivations of a manager implicated in a price-fixing arrangement and to conduct a cost-benefit analysis relating to the decision of starting and/or remaining in a cartel, at an individual level, including psychological and behavioral factors. Implications of this analysis for firms and public policy are strong. In particular, we analyze if and how, the personal incentives of managers justifies the adoption of specific measures at the firm’s level, and on top of that the intervention of public authorities. We therefore analyze the role of firms’ schemes and public policy in preventing these behaviors.

*This article is an automatic translation of the original article, provided here for your convenience. Read the original article. * [This article reflects the personal opinions of the author and does not commit the institutions to which he belongs.] Introduction 1. Developed following the pioneering work of Gary Becker (1968), the economics of crime has mainly been mobilized in antitrust to analyze a firm's decision to engage in a cartel: according to this approach, a firm is induced to form a cartel when the illicit gain resulting from this practice exceeds its expected cost, which depends both on the anticipated sanction and the probability of detection/conviction (see e.g. Connor and Lande [2012] for a synthesis of the literature). This approach, which focuses on legal persons

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Emmanuel Combe, Constance Monnier-Schlumberger, Fight against cartels and behaviour of managers, November 2016, Concurrences Nº 4-2016, Art. N° 81861, pp. 51-68

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