European Journal of Law and Economics

, Volume 44, Issue 3, pp 385–422 | Cite as

Registered cartels in Austria: an overview

  • Nikolaus Fink
  • Philipp Schmidt-Dengler
  • Konrad Stahl
  • Christine Zulehner
Article
  • 114 Downloads

Abstract

Cartels were legal to a large extent in Austria until the country’s EU accession in 1995. We examine archival material on registered horizontal cartels to learn about their inner working. Applying content analysis to legally binding cartel contracts, we comprehensively document different collusion methods along the lines described by Stigler (J Political Econ 72:44–61, 1964). Quota cartels employ regular reporting schemes and use compensation mechanisms for departures from set quotas. Specialization cartels divide markets, and rely the least on information exchange and punishment. Price and payment condition cartels primarily aim to prevent secret price cuts, requiring information provision upon request, allow for discretionary decision-taking and (sometimes immediate) punishment. These stylized facts on the contractual arrangements suggest that the possibility to write legally binding agreements was employed to address the usual obstacles to sustain collusion.

Keywords

Collusion Cartels Legal cartels Contracts 

JEL Classification

L410 L430 

References

  1. Alexander, B. (1994). The impact of the national industrial recovery act on cartel formation and maintenance costs. The Review of Economics and Statistics, 76(2), 45–54.CrossRefGoogle Scholar
  2. Alexander, B. (1997). Failed cooperation in heterogeneous industries under the National Recovery Administration. The Journal of Economic History, 57(2), 322–344.CrossRefGoogle Scholar
  3. Asker, J. (2010). A study of the internal organization of a bidding cartel. The American Economic Review, 100(3), 724–762.CrossRefGoogle Scholar
  4. Athey, S., & Bagwell, K. (2001). Optimal collusion with private information. The Rand Journal of Economics, 41(1), 92–117.Google Scholar
  5. Butschek, F. (2011). Österreichische Wirtschaftsgeschichte: von der Antike bis zur Gegenwart. Böhlau.Google Scholar
  6. Cave, J., & Salant, S. W. (1995). Cartel quotas under majority rule. American Economic Review, 85(1), 82–102.Google Scholar
  7. Chicu, M., Vickers, C., & Ziebarth, N. L. (2013). Cementing the case for collusion under the National Recovery Administration. Explorations in Economic History, 50(4), 487–507.CrossRefGoogle Scholar
  8. Ciarreta, A. (2012). Cartels and regulation: effects on prices and real sales in Sweden (1976–1990). European Journal of Law and Economics, 34(1), 127–146.CrossRefGoogle Scholar
  9. Connor, J. M. (2003). Private international cartels: effectiveness, welfare, and anticartel enforcement. Working Papers, 12(03).Google Scholar
  10. Cramton, P., & Palfrey, T. (1990). Cartel enforcement with uncertainty about costs. International Economic Review, 31(1), 17–31.CrossRefGoogle Scholar
  11. Davis, P., & Fletcher, A. (2013). Contributions to competition economics: Introduction. The Economic Journal, 123(572), F493–F504.CrossRefGoogle Scholar
  12. Farnleitner, J. (1977). Die Paritätische Kommission: Institution und Verfahren. Prugg, Eisenstadt, 2. Auflage Edition.Google Scholar
  13. Fink, N., Schmidt-Dengler, P., Stahl, K., & Zulehner, C. (2014). Registered cartels in Austria—coding protocol. Technical report, ZEW Mannheim.Google Scholar
  14. Genesove, D., & Mullin, W. P. (2001). Rules, communication, and collusion: Narrative evidence from the sugar institute case. American Economic Review, 91(3), 379–398.CrossRefGoogle Scholar
  15. Green, E. J., & Porter, R. (1984). Noncooperative collusion under imperfect price information. Econometrica, 52(1), 87–100.CrossRefGoogle Scholar
  16. Harrington, J. E. (2006). How do cartels operate?. Boston, Delft: Now Publishers Inc.Google Scholar
  17. Harrington, J. E., & Skrzypacz, A. (2007). Collusion under monitoring of sales. The RAND Journal of Economics, 38(2), 314–331.CrossRefGoogle Scholar
  18. Harrington, J. E., & Skrzypacz, A. (2011). Private monitoring and communication in cartels: Explaining recent collusive practices. American Economic Review, 101(6), 2425–49.CrossRefGoogle Scholar
  19. Haucap, J., Heimeshoff, U., & Schultz, L. M. (2010). Legal and illegal cartels in Germany between 1958 and 2004. mimeo.Google Scholar
  20. Hyytinen, A., Steen, F., & Toivanen, O. (2014). Anatomy of cartel contracts. mimeo.Google Scholar
  21. Ivaldi, M., Jullien, B., Rey, P., Seabright, P., and Tirole, J. (2003). The economics of tacit collusion. IDEI Working Papers 186, Institut d’Économie Industrielle (IDEI), Toulouse.Google Scholar
  22. Johnstone, H. W. (1951). The restraint of competition in the Austrian economy. mimeo.Google Scholar
  23. Levenstein, M. C., & Suslow, V. Y. (2006). What determines cartel success? Journal of Economic Literature, 44(1), 43–95.CrossRefGoogle Scholar
  24. Levenstein, M. C., & Suslow, V. Y. (2011). Breaking up is hard to do: Determinants of cartel duration. Journal of Law and Economics, 54(2), 455–492.CrossRefGoogle Scholar
  25. Nakazawa, T., & Weiss, L. W. (1989). The legal cartels of Japan. Antitrust Bulletin, 34, 641.Google Scholar
  26. Resch, A. (2002). Industriekartelle in Österreich vor dem Ersten Weltkrieg. Marktstrukturen, Organisationstendenzen und Wirtschaftsentwicklung von 1900 bis 1913. Mit ... Wirtschafts- und Sozialgeschichte; SWS 74). Duncker & Humblot GmbH.Google Scholar
  27. Röller, L.-H., & Steen, F. (2006). On the workings of a cartel: Evidence from the norwegian cement industry. The American Economic Review, 96(1), 321–338.CrossRefGoogle Scholar
  28. Schulte, H. (1980). Das österreichische Kartellrecht vor 1938. Dissertation, Westfälische-Wilhelms-Universität.Google Scholar
  29. Seidel, H. (2005). Österreichs Wirtschaft und Wirtschaftspolitik nach dem Zweiten Weltkrieg. Universitätsbuchhandlung: Manz’Sche Verlags- U.Google Scholar
  30. Stigler, G. J. (1964). A theory of oligopoly. The Journal of Political Economy, 72(1), 44–61.CrossRefGoogle Scholar
  31. Symeonidis, G. (2003). In which industries is collusion more likely? Evidence from the U.K. The Journal of Industrial Economics51(1), 45–74.CrossRefGoogle Scholar
  32. Taylor, J. E. (2007). Cartel code attributes and cartel performance: An industry-level analysis of the national industrial recovery act. Journal of Law and Economics, 50, 597–624.CrossRefGoogle Scholar
  33. Tüchler, M. (2003). Die Entwicklung des österreichischen Kartellrechts. In A. Resch (Ed.), Kartelle in Oesterreich (Vol. 23, pp. 121–148). Wien: Veröffentlichungen der österreichischen Gesellschaft für Unternehmensgeschichte.Google Scholar
  34. Vickers, C., & Ziebarth, N. L. (2014). Did the national recovery administration foster collusion? evidence from the macaroni industry. Journal of Economic History, 74, 831–862.CrossRefGoogle Scholar
  35. Wehsely, H. (1978). Kartellrecht und Kartellpolitik in der Praxis. Wiener Juristische Gesellschaft. Österreichische Juristen-Zeitung, pp. 465–467.Google Scholar

Copyright information

© Springer Science+Business Media, LLC 2017

Authors and Affiliations

  • Nikolaus Fink
    • 1
  • Philipp Schmidt-Dengler
    • 2
  • Konrad Stahl
    • 3
  • Christine Zulehner
    • 4
  1. 1.Austrian Regulatory Authority for Broadcasting and TelecommunicationsWienAustria
  2. 2.University of Vienna, WIFO, CEPR, CESifo, and ZEWViennaAustria
  3. 3.University of Mannheim, CEPR, CESifo, and ZEWMannheimGermany
  4. 4.Goethe-University Frankfurt, Telecom ParisTech, WIFO, and CEPRFrankfurt am MainGermany

Personalised recommendations