Cartels: The Probability of Getting Caught in the European Union

Abstract

In 1991, Bryant and Eckard estimated the annual probability that a cartel would be detected by the US Federal authorities, conditional on being detected, to be at most between 13% and 17%. In this paper, we develop a general stochastic detection model so as to describe the dynamic that governs the number of cartels alive at a given time. On the basis of this model, we estimated the same probability as Bryant and Eckard, 15 years later, over a European sample and we found an annual probability that falls between 12.9% and 13.3%. Our estimate is based on detection durations, calculated from data reported for all the cartels convicted by the European Commission from 1969 to the present date, and a statistical birth and death process model describing the onset and detection of cartels.

Note: Downloadable document is in French.

Keywords: Cartels, duration, analysis, birth and death process

JEL Classification: L41, C34, C41