Methods to spot Collusion

http://www.economist.com/news/finance-and-economics/21568364-how-antitrust-economists-are-getting-better-spotting-cartels-scam-busters

The article above shows some different methods that anti-trust economists are now adopting in order to identify cartels. The main bulk of the article is based on the Benford Law which states that in a large number of populations the leading number is not uniformly correlated as one may expect. Instead the number 1 is much more likely to be a leading number than the number 9. This can be seen from the graph below which shows the probability that the leading number will be the given constant.

benfordslaw

 

 

 

 

 

 

 

Anti-trust agencies can use this law to spot whether a firm is creating dubious numbers. [...]