The Psychology of Cartels
| Date | 01 June 2012 |
| Published date | 01 June 2012 |
| DOI | 10.1177/203228441200300207 |
| Author | Neil Warwick |
| Subject Matter | Conference Paper |
New Journal of Eu ropean Crimina l Law, Vol.3, Issue 2, 2012 181
THE PSYCHOLOGY OF CARTELS
N W*
e starting point for this paper and the Luxembourg Conference on the Criminalisation
of Cartels, is that cartels are a bad thing. Over the course of the two day conference it
was established there are a number of key reasons why cartels are an inherently bad
thing. Cartel activity:
– is essentially criminal.It is a form of the , not a victimless crime;
– is harmful to the economy preventing the e cient allocation of resources and
in ating prices;
– has a political element defying policy and law, risking the accumulation and
concentration of power; and
– has a moral stigma, the conspiratorial and collusively secretive behaviour indicative
of something more sinister than just overly aggressive business practices.
It therefore follows that if cartels are a bad thing, they must be prevented. Current
thinking led by the USA and promoted by OECD co-operation is that cartel conduct
is inherently criminal and must be prevented by deterrence. e nal debate of the
Luxembourg conference (which is partially summarised in this paper) was to explore
whether deterrence or compliance is the most e ective tool to prevent cartel activity.
Legal deterrence, derived from the theory of deterrence is the use of punishments
as a threat to deter people from o ending. Deterrence is derived from behavioural
psychology and is about preventing or controlling actions or behaviour through the
fear of punishment or retribution. Adapted as a criminological theory this has heavily
shaped the criminal justice system in the USA. However, the fact that the psychology
of deterrence is rooted in cognitive psychology means that it must address the belief
and motivation of individuals. Belief and motivation shape behaviour. Behaviour is a
choice, an outward expression of inward belief. In plain terms people are di erent, they
are motivated by di erent things and behave in di erent ways, so a one-size- ts-all
theory of deterrence may not prevent all forms of cartel behaviours.
As anticipated the Luxembourg conference allowed for the sharing of a huge
amount of experience and empirical evidence. Drawing on three key contributions, the
theory of deterrence can be diluted further by evidence from three di erent systems
from three di erent continents. Professor Caron Beaton Wells presented ndings of
* Solicitor, Partner Dickinson Dees, Newcastle.
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