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Hub and Spoke Cartels:

Incentives, Mechanisms and Stability

DOI https://doi.org/10.21552/core/2019/1/4

Rodrigo Londoño van Rutten, Caroline Buts


A hub and spoke (H&S) cartel entails both horizontal collusive behaviour and the involvement of at least one member operating at a different level of the supply chain. The blend of vertical and horizontal restraints raises both economic and legal questions. This article explores the main determinants for the existence of H&S cartels. Based on twelve cases, we first build a typology and analyse three types of H&S cartels. We focus on the structure of the cartel, the collusive mechanism and the economic incentives of participants. For each type, we thus discuss the elements that are necessary to fix the anticompetitive cooperation. In a second phase, we present descriptive statistics on the number of players, on cartel duration and on the length of procedures. Finally, we present a brief generalised summary for two main H&S cartel types. The purpose is to gain a better understanding of the hub and spoke cartel phenomenon.
Keywords: Hub and Spoke Cartels, Antitrust, Cartel Structure, Cartel Stability

Rodrigo Londoño van Rutten, PhD candidate, CEREC, University Saint-Louis Brussels. For correspondence: <mailto:rodrigo.londonovanrutten@usaintlouis.be>. Caroline Buts is professor at the Department of Applied Economics of the Faculty of Social Sciences and Solvay Business School at Vrije Universiteit Brussel. For correspondence: <mailto:Caroline.Buts@vub.be>. Suggestions and discussion regarding earlier work by Gilles Grandjean, Simon Schopohl and Wouter Vergote are gratefully acknowledged.

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