Competition and social relations between CEOs

The paper studies the impact of social networks on the level of within industry competition. Specifically, we examine the effect of social relations between CEOs on the propensity to cooperate with the antitrust agency during a cartel investigation.We use cartel data based on decisions by the European Commission for which the leniency program from 1996 applied. We find that none of the variables that measurethe intensity of CEO relationships contribute to the propensity to self-reveal the cartel existence. However, there is weak evidence that differences in some cultural dimensions affect cartel stability. Overall, the view that cartels can be understoodas socially embedded constructs sees not to be warranted.