Towards understanding what makes a cartel successful, this chapter examines a variety of collusive practices with an eye to how they vary in their efficacy in establishing and sustaining supracompetitive prices and in the legal risk they create for firms. Four conditions for cartel success are...

There are well-documented episodes for which prices remained at supracompetitive levels even after a cartel had been shut down by the competition authority. As long as market conditions remain reasonably stable, it is quite possible that collusive prices will still be incentive compatible so the...

We hypothesize a particular source of cartel instability and explore its relevance to understanding cartel dynamics. The cartel instability is rooted in the observation that, upon cartel formation, the relative positions of firms are often fixed which may lead some growth-conscious members to be...