Analyzing Economic Incentives in “Hub-and-Spoke” Conspiracies

This article provides an economic framework for analyzing incentives in “hub-and-spoke” conspiracies — arrangements that blend horizontal and vertical market relationships. Models of hub-and-spoke conspiracies involve participants at different supply chain levels (e.g. multiple manufacturers and a single distributor) whose interests may diverge. We categorize these conspiracies into four distinct classes based on the types of participants and where market power is primarily enhanced: (1) c