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South African competition law and the diamond "cartel"
South African Journal of Economic and Management Sciences | Vol 2, No 2 | a2579 |
DOI: https://doi.org/10.4102/sajems.v2i2.2579
| © 2018 W. D. Reekie
| This work is licensed under CC Attribution 4.0
Submitted: 03 July 2018 | Published: 30 June 1999
Submitted: 03 July 2018 | Published: 30 June 1999
About the author(s)
W. Duncan Reekie, Department of Business Economics, University of the Witwatersrand, South Georgia and the South Sandwich IslandsFull Text:
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De Beers Central Selling Organisation is a co-operative marketing agreement its objective is price stabilisation not collusive monopoly gain. Collusive agreements do not last. Nevertheless the CSO has persisted. Cartels can persist if government helps and this may have occurred up to 1950. Today only two (complementary) explanations remain. The "box" and "sight' system is the least-cost method of organising a distribution channel given bargaining and uncertainty and it stabilises prices for a product whose demand depend on a Veblenian mystique. Recent competition law does not allow for the transaction cost and demand analyses which explain this co-operative marketing agreement as non-collusive.
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Crossref Citations
1. The Competition Act, 1998: An Economic Perspective
W. Duncan Reekie
South African Journal of Economics vol: 67 issue: 2 first page: 115 year: 1999
doi: 10.1111/j.1813-6982.1999.tb01142.x