Competition and Collusion

Abstract

The preservation of competitive markets is a major cornerstone of modern economic policy. Cartels and anti-competitive practices are restricted, and competition authorities control mergers to avoid the excessive accumulation of market power. This chapter demonstrates that historical evidence is important to understand why cartels arise and how they work. It argues that the study of historical cartels from periods before the introduction of effective competition laws is necessary to understand how competition affects innovation and growth in the long run.