USING NETWORK THEORY TO DETECT DOMINANT CARTEL FIRMS

Despite multiple applications of network theory in different fields of social and legal sciences in general, the possibility of applying this theory to the economic analysis of the antitrust law and, more specifically, to the study of cartels has not yet been considered. Nevertheless, the study of c...

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Bibliographic Details
Published in:Journal of competition law & economics 2016-09, Vol.12 (3), p.541
Main Authors: Grau-Carles, Pilar, Cuerdo-Mir, Miguel
Format: Article
Language:English
Subjects:
Antitrust
Antitrust laws
Cartels
Studies
Online Access:Get full text
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Summary:Despite multiple applications of network theory in different fields of social and legal sciences in general, the possibility of applying this theory to the economic analysis of the antitrust law and, more specifically, to the study of cartels has not yet been considered. Nevertheless, the study of cartels as networks can advance some general elements and measurements that can help the detection and elimination of these organizational forms that cause evident harm to general well-being. This is the first time that the approach of network theory has been used to analyze cartels. This article uses a set of classical measures such as clustering and centrality measures, taken from network theory, and applies them to a specific case of a cartel sanctioned as such by the European Commission. This approach has enabled us to quantify some characteristic elements of the cartel, such as, for instance, a remarkable asymmetry between operators (nodes in the network), its different degree of influence (study of links), as well as the critical importance of some operators versus other cartelized agents, such that their elimination from the organization would not enable them to create their own cartel. This finding warrants reconsidering the antitrust policy based on leniency programs.
ISSN:1744-6414
1744-6422
DOI:10.1093/joclec/nhw016