A tip of the iceberg? The probability of catching cartels

Reliable estimates of the probability of cartel detection could help regulators design more appropriate sanctions for cartels, and improve our understanding of the efficiency of cartel enforcement and its potential deterrent effects. Yet, we only have sporadic evidence of what proportion of cartels is detected. In a recent paper I investigate the possibility of applying capture recapture (CR) methods to find out more about the detection rate of cartels. CR methods are widely used and have been rigorously developed in ecology and epidemiology for estimating population parameters such as population size, or capture and survival rates.

In comparison to previous works, this paper offers a more parsimonious and simple-to-use method to estimate time-dependent cartel detection and survival rates, whilst allowing for heterogeneity across firms and markets. It draws on capture-recapture methods, similar to those used in ecology to make inferences on various population characteristics by looking at the number of recurring individuals in successive samples with replacement. Given the simplicity and minimal data needs of this method, it could be developed to provide an important tool for cartel related policy analysis, something that could also lead to promising new research on the deterrent effect of cartel enforcement.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: