Economic Tools Can Help Evaluate Cartels Amid Recessions

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The authors analyze whether cartel formation is linked with broader macroeconomic conditions, such as pandemics, in this Law360 article.

U.S. antitrust authorities have communicated that although they will allow firms greater latitude to cooperate in fighting the pandemic, they will continue to aggressively monitor other forms of coordination.

With these warnings, it is fair to question whether cartel behavior is more likely to occur during an economic downturn. While the economic literature remains divided on the question of cyclicality of cartel formation, it has continued to forge new tools for detecting cartels and examining their effects.

In this article, authors Sachin Sancheti and Arthur Corea-Smith discuss findings from the economic literature on the question of whether cartel formation is linked with broader macroeconomic conditions. They also discuss how economic analysis can be useful in detecting cartels and examining their effects.

This article was originally published by Law360 in July 2020.


The views expressed in this article are solely those of the authors, who are responsible for the content, and do not necessarily represent the views of Cornerstone Research.

Economic Tools Can Help Evaluate Cartels Amid Recessions

Authors

  • New York

Sachin Sancheti

Vice President

  • New York

Arthur V. Corea-Smith

Associate