Posted: 20 Dec 2015 Last revised: 22 Nov 2016
Date Written: December 30, 2015
There is a growing literature in industrial organization on the use of empirical screens to detect cartels. I discuss several methodological issues that have emerged from this literature, and explain why addressing these issues is important for gaining a better understanding of the power and limitations of empirical screens and for extending the retrospective application of empirical screens to dynamic, real-time monitoring of the market. I then compare the treatment of empirical screens in the IO literature with the treatment of related techniques in the literatures of macroeconomics, financial market manipulation, and statistical fraud detection. I highlight the intersections and discuss lessons and experiences that are helpful to the design and use of empirical screens for both screening and monitoring. Future research topics are also suggested.
Keywords: Cartels, Market manipulation, Detection and monitoring, Multiple testing, Dimensionality, Competition authority, Corporate compliance
JEL Classification: C01, L13, L41
Suggested Citation: Suggested Citation