more products. Advantages in marketing and distribution refer to the pooling and streamlining, the ability to offer distributors a broader product line and the sharing of advertising cost. Research and development refers to substantial cost savings through knowledge-transfer and innovation. As can be seen from several efficiencies can be derived from cooperation and the competition law needs to take these into consideration. 5 Conclusion In present chapter the economic theory of collusion has been discussed in detail. It has been established that coordination, monitoring and punishment are necessary ingredients in achieving and sustaining collusion. That certain ingredients is necessary certain markets more prone to collusion than others, as coordination, monitoring and punishment becomes easier with certain factors at hand. The factors which facilitate collusion are seller concentration; number of firms; barriers to entry; symmetries in cost structure, products and market shares. Producer transparency has been found to be of extreme importance, as it enables firms to monitor the other´s behaviour, which is considered necessary to sustain collusion. Exchange of information is the main key to increase transparency, and is therefore considered extremely important. Cartel stability is contingent on a number of factors. There seems to be consensus in the literature about which factors affect stability albeit there seems to be a dispute on the effect of some of the factors. Leniency programs were found to have a destabilizing effect in cases where cartels were already facing instability. The theory on market power established why collusion can have a deleterious effect on welfare and that deadweight loss is not the only cost stemming from it. The cost of monopolizations must also be taken into consideration. The economic studies of cartels´ ability to increase prices established that many cartels did increase prices, however not all, which supports the fact that profit is not the only motive behind collusion. In contrast it was established that horizontal cooperation can also lead to efficiency gains. Part 3: Legal analysis of cartels In the previous part cartels were discussed from an economic perspective. First some general insights on collusion were provided, second the factors which are likely to facilitate collusion were
more products. Advantages in marketing and distribution refer to the pooling and streamlining, the ability to offer distributors a broader product line and the sharing of advertising cost. Research and development refers to substantial cost savings through knowledge-transfer and innovation. As can be seen from several efficiencies can be derived from cooperation and the competition law needs to take these into consideration. 5 Conclusion In present chapter the economic theory of collusion has been discussed in detail. It has been established that coordination, monitoring and punishment are necessary ingredients in achieving and sustaining collusion. That certain ingredients is necessary certain markets more prone to collusion than others, as coordination, monitoring and punishment becomes easier with certain factors at hand. The factors which facilitate collusion are seller concentration; number of firms; barriers to entry; symmetries in cost structure, products and market shares. Producer transparency has been found to be of extreme importance, as it enables firms to monitor the other´s behaviour, which is considered necessary to sustain collusion. Exchange of information is the main key to increase transparency, and is therefore considered extremely important. Cartel stability is contingent on a number of factors. There seems to be consensus in the literature about which factors affect stability albeit there seems to be a dispute on the effect of some of the factors. Leniency programs were found to have a destabilizing effect in cases where cartels were already facing instability. The theory on market power established why collusion can have a deleterious effect on welfare and that deadweight loss is not the only cost stemming from it. The cost of monopolizations must also be taken into consideration. The economic studies of cartels´ ability to increase prices established that many cartels did increase prices, however not all, which supports the fact that profit is not the only motive behind collusion. In contrast it was established that horizontal cooperation can also lead to efficiency gains. Part 3: Legal analysis of cartels In the previous part cartels were discussed from an economic perspective. First some general insights on collusion were provided, second the factors which are likely to facilitate collusion were
Cartels_in_the_EU_from_a_legal_and_economic_perspective.docx