Market Share Dynamics as A Collusion Clue: A Look at The European Heavy Vehicle Industry

Dr. Linnea F. Drexholm; Dr. Jornis E. Kavleck

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Market Share Dynamics as A Collusion Clue: A Look at The European Heavy Vehicle Industry

Dr. Linnea F. Drexholm ¹ , Dr. Jornis E. Kavleck ²

¹ Department of Economics and Business, Stockholm School of Economics, Stockholm, Sweden

² Centre for European Economic Research (ZEW), Mannheim, Germany

Issue Vol. 1 No. 01 (2024): V0LUME01 ISSUE01 --- Section Articles --- Published Date: 2024-12-18

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Abstract

This article explores how changes in market shares can subtly signal collusive behavior among companies, focusing specifically on the well-known European heavy vehicle cartel. We used economic analysis tools, including methods to spot sudden shifts and changes in market patterns, to see how market shares behaved when competition was healthy versus when companies were secretly colluding. Our findings show that during the cartel's active period, the market experienced unusual stability and deliberate re-distribution of market shares. We also saw what we call "umbrella effects," where companies not part of the cartel actually benefited. These patterns clearly stray from what you'd expect in a truly competitive market and perfectly match what economic theories predict about cartels. Ultimately, this research highlights that analyzing market shares can be a powerful tool for competition authorities. Especially when combined with advanced economic models and machine learning, it can help them uncover and prevent anti-competitive practices, protecting consumers and ensuring fair markets.

Keywords

Cartel detection, market shares, collusion, European heavy vehicle industry

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Market Share Dynamics as A Collusion Clue: A Look at The European Heavy Vehicle Industry. (2024). European Journal of Emerging Economics and Management, 1(01), 40-52. https://parthenonfrontiers.com/index.php/ejeem/article/view/56

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