Collusion through Common Leadership

This paper examines whether common leadership, defined as two firms sharing executives or board directors, contributes to collusion. Using an explicit measure of collusion from unsealed court evidence, we find that the probability of collusion between two firms increases by 12 percentage points after the onset of common leadership. These results are not driven by closeness of product or labor market competition, and are often driven by common leadership that involves an executive rather than an independent board director. Our findings are consistent with the increasing attention toward common leadership under Clayton Act Section 8. They also highlight the gap between stronger antitrust enforcement tools for collusion in product markets, and weaker tools in input markets.