Cartel overcharges

Connor, John M.

doi:10.1108/s0193-589520140000026008

Cited by 21 publications

(8 citation statements)

References 267 publications

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“…We recognize that not all economists are convinced that market experiments are good replicas of natural markets. Nevertheless, the outcomes of controlled laboratory cartel experiments broadly support the pattern of overcharges reported in Connor (2014a). 20.…”

Section: A Contribution To Legal-economic Scholarshipsupporting

confidence: 63%

“…We believe that the latter definition comes closest to the legal concept of damages. However, as a matter of practice, lawyers, judges, juries, and most economists opt to report the former percentages, and these are what is reported in Connor (2014a). 17 Fourth, about 7% of the studies in our sample reported that cartels were ineffective in raising prices.…”

Section: Criticisms Of the Overcharges Datamentioning

confidence: 84%

“…Langenfeld critiques three policy analyses by Connor and Lande (2005, 2012 that depend in part on overcharges estimates derived from the compilation reported in Connor (2014a). 20 We are puzzled why on page 3 Langenfeld shows so much deference to the 10% overcharge presumption.…”

Section: Policy Implications Should Depend Upon Overcharges Estimatesmentioning

confidence: 99%

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Comment on “The Empirical Basis for Antitrust: Cartels, Mergers, and Remedies”

Connor

Lande

2017

International Journal of the Economics of Business

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In this journal, James Langenfeld critically reviewed four of the present authors' articles that analyze the size of cartel overcharges and their antitrust policy implications. In this comment, we explain why we believe Langenfeld errs in his criticism of our work. In particular, this comment discusses the variation in research quality of the sources used to compile a large sample of historical cartel overcharges; the advisability of trimming outliers or large estimates from the sample; alleged publication bias; why our 25% median estimate is much more likely to be correct than the US Sentencing Guideline's 10% presumption; and the implications of the average cartel overcharges results for optimal deterrence and antitrust policy.

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Section: A Contribution To Legal-economic Scholarshipsupporting

confidence: 63%

Section: Criticisms Of the Overcharges Datamentioning

confidence: 84%

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Comment on “The Empirical Basis for Antitrust: Cartels, Mergers, and Remedies”

Connor

Lande

2017

International Journal of the Economics of Business

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“…A substantial number of studies exist that derive such overcharge estimates for various cartels in various industries and countries. Connor and Lande (2006) present a survey paper in which they include average overcharges of six economic surveys consisting of (in sum) more than 100 cartels. They find that the average cartel overcharges differ considerably between the different empirical studies.…”

Section: Empirical Evidencementioning

confidence: 99%

Concrete Shoes for Competition: The Effect of the German Cement Cartel on Market Price

Hüschelrath¹,

Müller²,

Veith³

2013

Journal of Competition Law and Economics

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Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW. Non-technical summarySince 2004, the European Commission (EC) has taken a number of steps to develop a legal framework that allows victims of EU antitrust infringements to obtain compensation. In its Green Paper on damages actions for breach of antitrust rules, the EC ( Although the public and academic discourse on the various methods and models to estimate damages certainly is a necessary step in the process of strengthening antitrust damages actions, the challenges of applying them in actual cases with real-world data are often ignored. Given the fact that the final damage value basically is a function of the demanded quantities of the cartelized product and the cartel-induced increase in price, it becomes apparent that especially the robust estimation of the so-called price overcharge is crucial for a coherent and welfare-improving private enforcement of anti-cartel rules.Against this background, we use publicly available price data from a German cement cartel to estimate the achieved price overcharge. In particular, we apply two different comparatorbased approaches -a 'before-and-after' approach and a 'difference-in-differences' approachand especially study the impact of various assumptions on the transition period from the cartel period to the non-cartel period on the estimated price overcharge. We find that the cartel managed to implement price increases in a range from 20.3% (extended approach with instrumented cement demand) to 20.7% (basic approach) for the 'before-and-after' method and from 26.2% (pooled OLS) to 26.5% (random-effects) for the 'difference-in-differences' method. For the (extended) 'before-and-after' approach, we further show that various assumptions on the transition period from the cartel period to the non-cartel period have a significant impact on the estimated price overcharge. Das Wichtigste in Kürze AbstractWe use publicly available price data from the German cement industry to estimate the cartelinduced price increase. We apply two different comparator-based approaches -the 'beforeand-after' approach and the 'difference-in-differences' approach -and especially study the impact of various assumptions on the transition period from the cartel period to the non-cartel period on the overcharge estimate. We find that the cement cartel led to price overcharges in a range from 20.3 to 26.5 percent depending on model approach and model assumptions.

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“…Audretsch (1989), for instance, found significantly elevated market prices for a sample of cartels in Western Germany. Connor and Lande (2006) collected average overcharges of six economic surveys consisting of more than 100 cartels (in sum) which are presented in Table 3. Lande (2006: 1004).…”

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confidence: 99%

Fighting hard core cartels

Hüschelrath¹,

Weigand²

The International Handbook of Competition – Second Edition

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Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW.Download this ZEW Discussion Paper from our ftp server:ftp://ftp.zew.de/pub/zew-docs/dp/dp10084.pdf Non-technical summaryThe paper provides a comprehensive survey of the economics behind the fight against hard core cartels. Following an introductory section, Section 2 focuses on the characterisation and rationalisation of the term 'hard core cartel'. It is found that -given the various forms of agreements between competitors -such a delineation is anything but straightforward.Subsequently, Section 3 concentrates on an assessment of the welfare effects of conduct defined as hard core cartel. A particular focus there lies on the possibilities to stabilize hard core cartels and the implied question of how severe the negative welfare effects of hard core cartels can be expected to be. Based on the key finding that hard core cartels can cause significant and long-lasting harm to customers and consumers, Section 4 focuses on the complementary question of how a cartel ban should be enforced by a competition authority, affected private parties and the respective court system. With respect to public enforcement, a focal point of interest lies in the assessment of both ex ante tools to reduce the incentives to form cartels and ex post tools to detect and intervene against existing cartels. By contrast, the economic assessment of private enforcement concentrates on the identification and quantification of the damages caused by hard core cartels. Finally, as the long term success of competition policy actions against hard core cartels depends on a continuous improvement and fine-tuning of policy tools, Section 5 discusses options to evaluate the effectiveness of enforcement actions against hard core cartels. Although it is not the focus of the paper to provide a detailed comparison of the proposed cartel enforcement framework with the current enforcement approaches followed in the European Union and the United States, the analysis reveals that some instruments discussed in the framework are currently not implemented to an economically optimal degree. Das Wichtigste in KürzeDer Beitrag entwickelt einen umfassenden Überblick über die grundlegenden ökonomischen

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Cartel overcharges

Cited by 21 publications

References 267 publications

Comment on “The Empirical Basis for Antitrust: Cartels, Mergers, and Remedies”

Comment on “The Empirical Basis for Antitrust: Cartels, Mergers, and Remedies”

Concrete Shoes for Competition: The Effect of the German Cement Cartel on Market Price

Fighting hard core cartels

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