The Overcharge as a Measure for Antitrust Damages

35 Pages Posted: 16 Apr 2009 Last revised: 30 Mar 2011

Martijn A. Han

Humboldt University of Berlin

Maarten Pieter Schinkel

University of Amsterdam - Amsterdam Center for Law & Economics (ACLE); Tinbergen Institute - Tinbergen Institute Amsterdam (TIA)

Jan Tuinstra

University of Amsterdam - Department of Quantitative Economics (KE); Tinbergen Institute

Date Written: August 12, 2009

Abstract

Victims of antitrust violations can recover damages in court. Yet, the quantification of antitrust damages and to whom they accrue is often complex. An illegal price increase somewhere in the chain of production percolates through to the other layers in a ripple of partial pass-ons. The resulting reductions in sales and input demands lead to additional harm to both downstream (in)direct purchasers and upstream suppliers. Nevertheless, U.S. civil antitrust litigation is almost exclusively concerned with direct purchaser claims for (treble) damages calculated on the basis of the overcharge. Similar best practice rules are emerging in Europe. In this paper, we show that there is no structural relationship between the direct purchaser overcharge and the true harm inflicted by an antitrust violation on all of the direct and indirect purchasers and sellers in the chain of production.

Keywords: Antitrust, damages, pass-on, overcharge

JEL Classification: C13, D43, L41

Suggested Citation

Han, Martijn A. and Schinkel, Maarten Pieter and Tuinstra, Jan, The Overcharge as a Measure for Antitrust Damages (August 12, 2009). Amsterdam Center for Law & Economics Working Paper No. 2008-08. Available at SSRN: https://ssrn.com/abstract=1387096 or http://dx.doi.org/10.2139/ssrn.1387096

Martijn A. Han (Contact Author)

Humboldt University of Berlin ( email )

Unter den Linden 6
Berlin, Berlin 10099
Germany

HOME PAGE: http://www.martijnhan.com

Maarten Pieter Schinkel

University of Amsterdam - Amsterdam Center for Law & Economics (ACLE) ( email )

Roetersstraat 11
1018 WB Amsterdam
Netherlands
+31 20 525 7132 (Phone)
+31 20 525 5318 (Fax)

Tinbergen Institute - Tinbergen Institute Amsterdam (TIA) ( email )

Gustav Mahlerplein 117
Amsterdam, 1082 MS
Netherlands

Jan Tuinstra

University of Amsterdam - Department of Quantitative Economics (KE) ( email )

Roetersstraat 11
Amsterdam, 1018 WB
Netherlands

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

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