Why Managers Engage in Price Fixing? An Analytical Framework

Abstract

This article analyses the incentives for a manager to engage in a cartel, by mobilizing the framework of the ‘economics of crime’. We apply a cost-benefit analysis, relating to the decision of starting and/or remaining in a cartel, at an individual level, including psychological and behavioural factors. It also examines the various solutions – both at company and public authority level – to limit individual incentives to engage in this type of practice, and the role of public policy, in the broad sense of the term, in preventing these behaviours. antitrust policy, public policy, cartels, criminal antitrust enforcement, leniency, dissuasive fines, whistleblowing, illegal Behaviour, corporate fraud, incentives