Cartel Overcharges and Optimal Cartel Fines

16 Pages Posted: 20 Oct 2008

See all articles by Robert H. Lande

Robert H. Lande

University of Baltimore - School of Law

John M. Connor

Purdue University; American Antitrust Institute (AAI)

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Date Written: October 16, 2008

Abstract

This chapter examines how high cartels raise prices on average and what this should mean for the current criminal fine levels in the U.S. Sentencing Guidelines. We utilize two distinct data sets (economic and other studies, and verdicts in final cartel cases) and find that cartels have caused average overcharges in the range of 31 to 49 percent and median overcharges in the range of 22 to 25 percent of affected commerce. We conclude that the current Sentencing Commission presumption that cartels overcharge on average by 10 percent is much too low, and the current levels of cartel penalties should be increased significantly.

Suggested Citation

Lande, Robert H. and Connor, John M. and Connor, John M., Cartel Overcharges and Optimal Cartel Fines (October 16, 2008). Available at SSRN: https://ssrn.com/abstract=1285455 or http://dx.doi.org/10.2139/ssrn.1285455

Robert H. Lande

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