Factors Influencing the Magnitude of Cartel Overcharges: An Empirical Analysis of Food Industry Cartels

Posted: 14 Jul 2008

See all articles by John M. Connor

John M. Connor

Purdue University; American Antitrust Institute (AAI)

Yuliya Bolotova

University of Idaho

Douglas J. Miller

University of Missouri at Columbia - Department of Economics

Abstract

Using the overcharge estimates for 395 cartel episodes, we evaluate the impact of cartel characteristics on the size of overcharges imposed by cartels in different geographic markets and during six antitrust law regimes starting from the 18th century. We find that the average overcharge imposed by cartels in our sample is 19 percent and the median is 16 percent of the selling price. Food industry cartels impose lower overcharges than cartels in other industries, and this difference is statistically significant. International cartels tend to impose higher overcharges than domestic cartels. Longer cartel episodes generate higher levels of overcharges. Cartels that were found or pled guilty achieve approximately the same levels of overcharges as legal cartels.

Keywords: Antitrust, Cartels, Food Industry, Overcharges

JEL Classification: L1, L2, L4, L6

Suggested Citation

Connor, John M. and Connor, John M. and Bolotova, Yuliya and Miller, Douglas J., Factors Influencing the Magnitude of Cartel Overcharges: An Empirical Analysis of Food Industry Cartels. Available at SSRN: https://ssrn.com/abstract=1101745

John M. Connor

Purdue University ( email )

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Yuliya Bolotova (Contact Author)

University of Idaho ( email )

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Douglas J. Miller

University of Missouri at Columbia - Department of Economics ( email )

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