Abstract illustration of interconnected gears and networks representing collusion, with deep shadows and symbols of economic theory, and case studies, to showcase how the research on the topic has changed.

The Cartel Code: How Collusion Research is Changing the Game

Avery Sinclair in Business & Economy August 2025 • 4 min read.

"Is cartel research falling behind? Discover why the shift from theory to case studies might weaken competition enforcement."

Collusion, the secret agreement between firms to manipulate the market, remains a significant threat to consumer welfare and fair competition. Academic research plays a crucial role in understanding the economic drivers and behavioral patterns of cartels, providing essential guidance for competition authorities. However, the approaches to studying collusion are evolving, and these changes could have profound implications.

The traditional focus on stylized oligopoly game theory is giving way to empirical case studies of cartels. This shift raises a critical question: Does this new emphasis strengthen our ability to detect and prevent collusion, or does it create new vulnerabilities? This article delves into a groundbreaking analysis of over 20 years of collusion research, revealing how the field has transformed and what these changes might mean for the future of competition enforcement.

Using advanced natural language processing techniques, including structural topic modeling, we’ll unpack the key themes, methodologies, and trends that have shaped collusion research. We’ll also examine how these academic insights translate into real-world cartel detection capabilities.

The Rise of Empirical Case Studies: Is Theory Taking a Backseat?

Abstract illustration of interconnected gears and networks representing collusion, with deep shadows and symbols of economic theory, and case studies, to showcase how the research on the topic has changed.

For years, collusion research was dominated by game theory, which used mathematical models to predict how firms might collude under different market conditions. These models provided a framework for understanding the incentives and strategies involved in cartel behavior. However, in recent years, there's been a notable shift toward empirical case studies, where researchers analyze real-world examples of cartels, often focusing on specific industries or historical cases.

A recent analysis of publications on collusion reveals that rule-based reasoning, which focuses on the behavior of firms in general, is in decline. This decline coincides with a surge in empirical case studies of disclosed cartels and their court cases. While the variety of subjects included in research has grown, the pluralism in economic questions addressed is in descent, raising questions about whether this will benefit or harm cartel detection capabilities.

Uni- and multivariate time series analyses show that empirical case studies haven't replaced game-theoretic modeling but rather filled a gap left by the decline in rule-based reasoning.
There's a tendency toward monocultures in topics covered and an endogenous constriction of the topic variety.
The variety of subjects included has grown, but the pluralism in economic questions addressed is in descent.

This trend toward case studies isn't inherently negative. Analyzing specific instances of collusion can provide deep insights into how cartels operate, the strategies they use, and the factors that contribute to their success or failure. However, there are concerns that this shift may come at a cost. By focusing on individual cases, researchers may lose sight of the broader economic principles that make collusion possible in the first place.

A Call for Balance: Integrating Theory and Empirical Analysis

The evolution of collusion research highlights the ongoing need for balance. While empirical case studies offer valuable insights into real-world cartel behavior, they shouldn't overshadow the importance of theoretical frameworks that provide a broader understanding of the underlying economic principles. By integrating both approaches, we can develop more effective strategies for detecting and preventing collusion, safeguarding competition, and protecting consumers.

About this Article -

This article was crafted using a human-AI hybrid and collaborative approach. AI assisted our team with initial drafting, research insights, identifying key questions, and image generation. Our human editors guided topic selection, defined the angle, structured the content, ensured factual accuracy and relevance, refined the tone, and conducted thorough editing to deliver helpful, high-quality information.See our About page for more information.

This article is based on research published under:

DOI-LINK: 10.1111/joes.12600,

Title: From Rules To Regs: A Structural Topic Model Of Collusion Research

Subject: econ.gn q-fin.ec

Authors: W. Benedikt Schmal

Published: 06-10-2022

Everything You Need To Know

What is collusion and why is it a problem?

Collusion is a secret agreement between firms to manipulate the market. This behavior poses a significant threat to consumer welfare and fair competition. It allows firms to artificially inflate prices, restrict output, and otherwise distort the market, leading to higher prices and reduced choices for consumers. The harm can be mitigated by academic research which offers guidance to competition authorities.

How has the approach to collusion research changed over the last 20 years?

Over the past two decades, the field of collusion research has shifted from a primary focus on stylized oligopoly game theory to empirical case studies. Initially, collusion research was heavily influenced by game theory, which used mathematical models to understand cartel behavior. This theoretical approach is now giving way to empirical case studies of real-world cartels, including analysis of specific industries and historical cases.

What are the advantages and disadvantages of focusing on empirical case studies in collusion research?

Analyzing empirical case studies offers the benefit of providing deep insights into how cartels operate in the real world, including their strategies and factors contributing to their success or failure. However, a potential disadvantage is that an overemphasis on individual cases might lead researchers to lose sight of the broader economic principles that make collusion possible. While rule-based reasoning declines, empirical case studies of disclosed cartels are on the rise.

What role does game theory play in understanding cartels?

Game theory provides a theoretical framework for understanding the incentives and strategies involved in cartel behavior. Game theory uses mathematical models to predict how firms might collude under different market conditions. These models help researchers understand the underlying economic principles of collusion, which is essential for the competition authorities to detect and prevent it. The decline in rule-based reasoning, which is connected to game theory, indicates that there is a need for balance and integration of both theoretical and empirical analysis.

How can we ensure effective strategies for detecting and preventing collusion?

To ensure effective strategies, a balance between theoretical frameworks and empirical case studies is essential. While empirical case studies offer valuable insights into real-world cartel behavior, they shouldn't overshadow the importance of theoretical frameworks. By integrating both approaches, competition authorities and researchers can develop more effective strategies for detecting and preventing collusion, ultimately safeguarding competition and protecting consumers. This combined approach enables a more comprehensive understanding of collusion, leading to more effective enforcement and prevention measures.