Supportive Empirical Evidences for Cartel Detection and Dating: A Case-Based Structural Break Unit Root Tests.

As competition authorities increasingly adopt empirical tools to identify and investigate anti-competitive behaviour, the need for reliable and complementary screening methods has become more pronounced. Traditional methods of cartel detection such as leniency applications or whistleblower reports remain vital but exhibiting decreasing trend and are often limited by their dependence on voluntary cooperation or circumstantial evidence. The economic literature demonstrates that cartels typically generate structural instability in key market parameters such as prices, market shares, costs, and markups. These distortions, when analysed through timeseries econometrics, can reveal statistically significant shifts that correspond to the formation or breakdown of collusive agreements. This study positions structural break unit root tests, specifically the Zivot-Andrews and LeeStrazicich tests as valuable tools within a broader toolkit for competition enforcement. Their capacity to endogenously identify breakpoints provides a nuanced method for dating cartel behaviour, which is often challenging due to its covert nature. The methodology is particularly useful when authorities seek to delineate the period of collusion ex post, or to strengthen the plausibility of cartel activity through observable market outcomes. By detecting statistically significant breaks in market variables, these tests can direct further investigation or bolster the evidentiary foundation in legal proceedings. This paper applies these tests to a known cartel case in Turkey and finds that the methods yield meaningful, reliable, and temporally informative results. In doing so, it illustrates how structural break tests, when applied with methodological care and contextual awareness, can provide a delicate yet robust layer of empirical support in the detection and dating of collusion. This makes them not only analytically relevant but also practically useful for enforcement agencies striving for rigorous and fair competition policy implementation. [ABSTRACT FROM AUTHOR]