[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/aea/jecper/v20y2006i3p195-208.html
   My bibliography  Save this article

Markets: Continuity and Change in the International Diamond Market

Author

Listed:
  • Debora L. Spar
Abstract
The international diamond cartel, which presides over the production side of the industry, may be the most successful and longest-lasting cartel in the world. The dominant company in the industry, DeBeers, has been around since 1880 and has been controlled by a single South African family, the Oppenheimers, since 1925. Eight countries produce the bulk of the world's gem diamonds, and most of the producing entities within these countries conform to a set of rules. This conformity is the product of over a century of careful planning and negotiation, in which DeBeers has undertaken largely successful efforts to control the diamond trade and maximize its long-term prospects. The past decade has seen the end of apartheid in South Africa, the fall of communism in Russia, the opening of major mines in Canada, and the emergence of a worldwide movement against so-called "blood" or "conflict" diamonds. While, these developments have pummeled the diamond industry and forced its central players -- most notably DeBeers -- to change the nature of their trade, these changes have not affected the core dynamic of the global diamond market. It remains an industry dominated by a single firm and an industry in which, perhaps uniquely, all of the major players understand the extent to which their long-term livelihood depends on the fate and actions of the others.

Suggested Citation

  • Debora L. Spar, 2006. "Markets: Continuity and Change in the International Diamond Market," Journal of Economic Perspectives, American Economic Association, vol. 20(3), pages 195-208, Summer.
    • Handle: RePEc:aea:jecper:v:20:y:2006:i:3:p:195-208
    Note: DOI: 10.1257/jep.20.3.195
    as

    Download full text from publisher

    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jep.20.3.195
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Margaret C. Levenstein & Valerie Y. Suslow, 2002. "What Determines Cartel Success?," UMASS Amherst Economics Working Papers 2002-01, University of Massachusetts Amherst, Department of Economics.
    2. Mr. Matthias Vocke & Nienke Oomes, 2003. "Diamond Smuggling and Taxation in Sub-Saharan Africa," IMF Working Papers 2003/167, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Seitz, William Hutchins, 2016. "Stock market reactions to conflict diamond trading restrictions and controversies," Business and Politics, Cambridge University Press, vol. 18(1), pages 63-84, April.
    2. Renneboog, Luc & Spaenjers, Christophe, 2012. "Hard assets: The returns on rare diamonds and gems," Finance Research Letters, Elsevier, vol. 9(4), pages 220-230.
    3. Cyrlene Claasen & Julia Roloff, 2012. "The Link Between Responsibility and Legitimacy: The Case of De Beers in Namibia," Journal of Business Ethics, Springer, vol. 107(3), pages 379-398, May.
    4. Péter Eső & Volker Nocke & Lucy White, 2010. "Competition for scarce resources," RAND Journal of Economics, RAND Corporation, vol. 41(3), pages 524-548, September.
    5. Rita Laura D’Ecclesia & Vera Jotanovic, 2018. "Are diamonds a safe haven?," Review of Managerial Science, Springer, vol. 12(4), pages 937-968, October.
    6. Auer, Benjamin R. & Schuhmacher, Frank, 2013. "Diamonds — A precious new asset?," International Review of Financial Analysis, Elsevier, vol. 28(C), pages 182-189.
    7. Renneboog, L.D.R., 2013. "The Returns on Investment Grade Diamonds," Discussion Paper 2013-025, Tilburg University, Center for Economic Research.
    8. Rigterink, Anouk S., 2011. "Diamonds and violence in Africa. Uncovering relationships and mechanisms," MPRA Paper 45235, University Library of Munich, Germany.
    9. Chong, Terence T.L. & Lu, Chenxi & Chan, Wing Hong, 2012. "Long-range dependence in the international diamond market," Economics Letters, Elsevier, vol. 116(3), pages 401-403.
    10. Vera Jotanovic & Rita Laura D’Ecclesia, 2019. "Do Diamond Stocks Shine Brighter than Diamonds?," JRFM, MDPI, vol. 12(2), pages 1-19, May.
    11. Frank Scott & Aaron Yelowitz, 2010. "Pricing Anomalies In The Market For Diamonds: Evidence Of Conformist Behavior," Economic Inquiry, Western Economic Association International, vol. 48(2), pages 353-368, April.
    12. Seitz William Hutchins, 2016. "Stock market reactions to conflict diamond trading restrictions and controversies," Business and Politics, De Gruyter, vol. 18(1), pages 63-84, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kaplow, Louis & Shapiro, Carl, 2007. "Antitrust," Handbook of Law and Economics, in: A. Mitchell Polinsky & Steven Shavell (ed.), Handbook of Law and Economics, edition 1, volume 2, chapter 15, pages 1073-1225, Elsevier.
    2. Tanja Artiga González & Markus Schmid & David Yermack, 2019. "Does Price Fixing Benefit Corporate Managers?," Management Science, INFORMS, vol. 65(10), pages 4813-4840, October.
    3. Pop, Izabela Luiza, 2015. "Cartels: a Good or a Bad Strategy?," MPRA Paper 67314, University Library of Munich, Germany.
    4. Davies, Stephen & Olczak, Matthew & Coles, Heather, 2011. "Tacit collusion, firm asymmetries and numbers: Evidence from EC merger cases," International Journal of Industrial Organization, Elsevier, vol. 29(2), pages 221-231, March.
    5. Andreoli-Versbach, Patrick & Franck, Jens-Uwe, 2015. "Endogenous price commitment, sticky and leadership pricing: Evidence from the Italian petrol market," International Journal of Industrial Organization, Elsevier, vol. 40(C), pages 32-48.
    6. Hinloopen, Jeroen & Onderstal, Sander, 2014. "Going once, going twice, reported! Cartel activity and the effectiveness of antitrust policies in experimental auctions," European Economic Review, Elsevier, vol. 70(C), pages 317-336.
    7. In Lee, 1999. "Non-cooperative Tacit Collusion, Complementary Bidding and Incumbency Premium," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 15(2), pages 115-134, September.
    8. Tomaso Duso & Lars-Hendrik Röller & Jo Seldeslachts, 2014. "Collusion Through Joint R&D: An Empirical Assessment," The Review of Economics and Statistics, MIT Press, vol. 96(2), pages 349-370, May.
    9. Maarten Pieter Schinkel & Jan Tuinstra & Jakob Rüggeberg, 2008. "Illinois Walls: how barring indirect purchaser suits facilitates collusion," RAND Journal of Economics, RAND Corporation, vol. 39(3), pages 683-698, September.
    10. Harrington, Joseph E. & Hüschelrath, Kai & Laitenberger, Ulrich & Smuda, Florian, 2015. "The discontent cartel member and cartel collapse: The case of the German cement cartel," International Journal of Industrial Organization, Elsevier, vol. 42(C), pages 106-119.
    11. David BARTOLINI & Alberto ZAZZARO, 2008. "Are Antitrust Fines Friendly to Competition? An Endogenous Coalition Formation Approach to Collusive Cartels," Working Papers 325, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    12. Marcel Boyer & Rachidi Kotchoni, 2011. "The Econometrics of Cartel Overcharges," Working Papers hal-00631429, HAL.
    13. Flochel, Laurent & Versaevel, Bruno & de Villemeur, Étienne, 2009. "Optimal Collusion with Limited Liability and Policy Implications," TSE Working Papers 09-027, Toulouse School of Economics (TSE), revised Jul 2011.
    14. Ibrahim A. Onour, 2018. "Do Political Internal Unrest and Smuggling of Precious Metals are Associated? Evidence from a Conflict Country," International Journal of World Policy and Development Studies, Academic Research Publishing Group, vol. 4(1), pages 1-5, 01-2018.
    15. Pedro Mendi & Róbert F. Veszteg, 2009. "Sustainability of collusion: evidence from the late 19th century basque iron and steel industry," Investigaciones Economicas, Fundación SEPI, vol. 33(3), pages 385-405, September.
    16. Connor, John M. & Bolotova, Yuliya, 2006. "Cartel overcharges: Survey and meta-analysis," International Journal of Industrial Organization, Elsevier, vol. 24(6), pages 1109-1137, November.
    17. repec:hal:spmain:info:hdl:2441/6782 is not listed on IDEAS
    18. Andrew F. Newman & Patrick Legros, 2011. "Incomplete Contracts and Industrial Organization: A Survey," Boston University - Department of Economics - Working Papers Series WP2011-036, Boston University - Department of Economics.
    19. B. Douglas Bernheim & Erik Madsen, 2017. "Price Cutting and Business Stealing in Imperfect Cartels," American Economic Review, American Economic Association, vol. 107(2), pages 387-424, February.
    20. Xavier Vanssay & Can Erutku, 2011. "Damage at the Pump: Does Punishment Fit the Crime?," Journal of Industry, Competition and Trade, Springer, vol. 11(4), pages 351-367, December.
    21. Marc Escrihuela-Villar & Jorge Guillen, 2011. "On Collusion and Industry Size," Annals of Economics and Finance, Society for AEF, vol. 12(1), pages 31-40, May.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:jecper:v:20:y:2006:i:3:p:195-208. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michael P. Albert (email available below). General contact details of provider: https://edirc.repec.org/data/aeaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.