Conception of Cartels: Definition and Diversity

According to various sources, since 1880 or 1888, hundreds of economists, historians, lawyers, and prosecutors have laboured to crystallise the concept of cartels, define the causes of cartel formation, generalise the mechanism of cartel functioning, assess their role in the market and the effects on the economy and the wealth of nations, as well as to develop legal regulation for cartels. Although a tendency of rivals to collude was already mentioned in the Wealth of Nations (1776), a magnum opus by the father of political economy, Adam Smith, Connor and Bolotova (2006) note that one of the first economists to analyse cartel issues was Bullock (1901) who investigated cartels existing around 1890 and arrived at the conclusion that the price effects of cartels could not be adequately estimated. More than a century has passed since the first attempts to analyse and estimate cartels. An increasing number of researchers, economists, lawyers, businessmen, and politicians become interested in cartel-related problems. As a result, there appear more and more research papers, studies and surveys on these topics. The scope of economic research has considerably grown since 1999 in the context of intensive efforts being taken in the European Union, the United States of America, Canada, and Japan in the area of competition law-making and legislative modifications with regard to cartels and compensation for damages caused by cartel practices. The growing interest and abundance of new research produce new results and conclusions, or specify and supplement the existing ones that were not possible in early cartel analyses due to insufficient information and historical data, and unavailability of research methods and technical possibilities.