Economists and policy analysts know very little about the conditions under which cartels are formed in differing legal environments, about their behaviour towards outsiders or deviating insiders and about their reactions to changes in the economic environment. In this project, we wish to analyse these aspects theoretically and empirically using data on legal and illegal cartels in various jurisdictions. A particular focus lies on the empirical, sector-specific comparison of the behaviour of legal cartels formed in countries with permissive legal environments with illegal cartels formed - and detected – in countries with rigid policy regimes.