Forensic Economics: An Introduction with Special Emphasis on Price Fixing

Posted: 14 Jul 2008

See all articles by John M. Connor

John M. Connor

American Antitrust Institute (AAI); Purdue University

Multiple version iconThere are 3 versions of this paper

Date Written: March 2008

Abstract

This paper aims at explaining accepted methods of forensic analysis and how forensic economics is used in the context of competition-law enforcement. Illustrations are drawn from ancient and modern antitrust cases involving price-fixing allegations. The stated goal of antitrust laws of most nations is deterrence. Optimal deterrence requires that cartel penalties be based on multiples of economic injuries. Yet, antitrust authorities are typically reluctant to calculate fines on the basis of damages because of perceived analytical challenges or because the fact-finders lack needed economic education. However, reasonable estimates of damages can often be quickly prepared using simpler methods than econometric modeling. More often than not, alternative estimates of cartel overcharges tend to be mutually supportive. The reluctance of antitrust authorities to base fines on damages seems to indicate an abundance of caution.

Suggested Citation

Connor, John M. and Connor, John M., Forensic Economics: An Introduction with Special Emphasis on Price Fixing (March 2008). Journal of Competition Law and Economics, Vol. 4, Issue 1, pp. 31-59, 2008, Available at SSRN: https://ssrn.com/abstract=1159273 or http://dx.doi.org/nhm022

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