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CRIME BY COMMITTEE: CONSPIRATORS AND COMPANY MEN IN THE ILLEGAL ELECTRICAL INDUSTRY CARTEL, 1954–1959 1
Author(s) -
FAULKNER ROBERT R.,
CHENEY ERIC R.,
FISHER GENE A.,
BAKER WAYNE E.
Publication year - 2003
Publication title -
criminology
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 3.467
H-Index - 139
eISSN - 1745-9125
pISSN - 0011-1384
DOI - 10.1111/j.1745-9125.2003.tb00996.x
Subject(s) - cartel , price fixing , incentive , business , collusion , market structure , industrial organization , economics , microeconomics
We show how cartels rely on the adaptive social structure of committee meetings to ameliorate the competitive difficulties of markets. We distill the structure of the cartel committee and test hypotheses relating market structure to committee structure and ultimately to the efficacy of cartel price‐fixing. Cartel continuity and the corporate authority of the cartel are strong predictors of cartel effectiveness. Cartel continuity is responsive to market conditions that favor cartel formation. Centralization of cartel authority in decision making results in improved collusive pricing effectiveness. Centralization of cartel authority responds to expanding industry volume that bring about incentives to increase firm level market share at the expense of other cartel members.