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Crisis Cartels: For Better or For Worse?

BY | March 30, 2011

Lia Vitzilaiou, Mar 30, 2011 Cartels typically involve private agreements that limit quantities sold, thereby effectively raising prices; in turn this transfers income from buyers to sellers and reduces the…

Lia Vitzilaiou, Mar 30, 2011

Cartels typically involve private agreements that limit quantities sold, thereby effectively raising prices; in turn this transfers income from buyers to sellers and reduces the allocative efficiency of the market mechanism. This market distortion is regarded as so detrimental to the institution of competition and to consumers, that strict enforcement of competition rules against cartels has been a top priority for most competition authorities globally.

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