This book reviews the theory of unlawful collusion, which means there is a competition law and firms are colluding in a manner that violates that law and, if convicted, they will be penalized. The book is designed to bring the reader up to speed on the questions posed, the models constructed, and the results and insight derived, as well as identifying topics in need of research. The intended audience is economics scholars who seek to contribute to our understanding of how unlawful collusion operates and the proper design of competition law and enforcement or those who just want to learn about these topics. Doctoral economics students are particularly welcome, and I encourage them to look for the gaps in the literature that could be the source of a thesis topic.
The reader is presumed to have at least a rudimentary understanding of the theory of collusion grounded in the theory of repeated games. Suitable treatments at the masters level are provided in Tirole (1988) and Motta (2004), while Vives (1999) is at the doctoral level. If, before taking a “ramble through the wilds of economic theory,”1 the reader would like to have some facts about how cartels are structured and the practices that they deploy, I recommend Harrington (2006) and Marshall and Marx (2012). Marshall and Marx (2012) is an innovative treatment designed for practitioners, both lawyers and economists, though it is also of considerable value to scholars. Harrington (2006) is well suited for those seeking institutional and factual grounding before venturing into the theory of collusion in that its coverage of collusive practices is organized around the primary theoretical constructs.
I acknowledge the comments of an anonymous referee, participants at the Legal and Illegal Cartels Conference (ZEW, Mannheim, December 2015), where a preliminary version of this book was presented as a keynote address, and the National Science Foundation (SES-1148129) for financial support.
1. United States v. Topco Assocs., 405 U.S. 596, 610, n. 10 (1972).