Analyzing Economic Incentives in “Hub-and-Spoke” Conspiracies

This article provides an economic framework for evaluating hub and spoke conspiracies.

This article provides an economic framework for analyzing incentives in “hub-and-spoke” conspiracies, which are arrangements that blend horizontal and vertical market relationships. Models of hub-and-spoke conspiracies involve participants at different supply chain levels (e.g. multiple manufacturers and a single distributor) whose interests may diverge. Coauthors Celeste Saravia and Laurien Gilbert categorize these conspiracies into four distinct classes based on the types of participants and where market power is primarily enhanced:

• conspiracies that primarily harm competition in the market served by the vertical hub
• conspiracies that primarily harm competition in the market served by each of the horizontal participants
• conspiracies that harm competition in the market served by both vertical and horizontal participants
• the emerging class of “algorithmic collusion” involving software providers that allegedly facilitate collusion as one of their core functions, which are similar to hub-and-spoke conspiracies in that not all participants are horizontal competitors.

Further, this article explores the economic incentives of vertically-related participants to facilitate conspiracies that seem, at least facially, designed to produce outcomes that are contrary to their economic interests. Understanding these underlying incentives is a critical part of an economic analysis of hub-and-spoke conspiracy allegations.

This article was originally published in Competition Policy International’s Antitrust Chronicle in January 2026.