Factors Influencing the Magnitude of Cartel Overcharges: An Empirical Analysis of the U.S. Market

Posted: 1 Jun 2009

See all articles by Yuliya Bolotova

Yuliya Bolotova

University of Idaho

John M. Connor

Purdue University; American Antitrust Institute (AAI)

Douglas J. Miller

University of Missouri at Columbia - Department of Economics

Date Written: June 2009

Abstract

Using the overcharge estimates for 333 cartel episodes, we evaluate the effect of cartel characteristics and changes in the market and legal environment on the magnitude of overcharges imposed by private cartels in the United States and other geographic markets as early as the eighteenth century. The median overcharge attained by cartels represented in our sample is 18 percent of selling price. International cartels imposed higher overcharges than domestic cartels. Longer cartel episodes generated higher overcharges. Overcharges achieved in the United States and European markets were lower than overcharges imposed in the Asian markets and in the rest of the world. Overcharges tended to decline as antitrust enforcement became stricter. Higher overcharges were associated with markets where cartels had high market shares and with markets characterized by high levels of fixed costs.

Keywords: K21, L10

Suggested Citation

Bolotova, Yuliya and Connor, John M. and Miller, Douglas J., Factors Influencing the Magnitude of Cartel Overcharges: An Empirical Analysis of the U.S. Market (June 2009). Journal of Competition Law and Economics, Vol. 5, Issue 2, pp. 361-381, 2009, Available at SSRN: https://ssrn.com/abstract=1411532 or http://dx.doi.org/nhn025

Yuliya Bolotova (Contact Author)

University of Idaho ( email )

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John M. Connor

Purdue University ( email )

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American Antitrust Institute (AAI) ( email )

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Douglas J. Miller

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

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Columbia, MO 65211
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