Download this Paper Open PDF in Browser

Price Fixing Overcharges: Revised 2nd Edition

114 Pages Posted: 19 May 2010  

John M. Connor

American Antitrust Institute (AAI)

Date Written: April 27, 2010

Abstract

This paper surveys almost 600 published economic studies and judicial decisions that contain 1,517 quantitative estimates of overcharges of hard-core cartels, of which 8% are zero. The primary finding is that the median long-run overcharge for all types of cartels over all time periods is 23.3%. The median overcharge for international cartels (30.0%) is significantly higher than for domestic cartels (17.2%). Cartel overcharges are negatively skewed, pushing the mean overcharge for all successful cartels to 50.4%. Convicted cartels are on average slightly more effective at raising prices as unpunished cartels, whereas bid-rigging conduct displays lower mark-ups than price-fixing cartels. Because some jurisdictions fine illegal cartels on the presumption of a 10% overcharge, these averages suggest that penalty guidelines aimed at optimally deterring cartels ought to be increased.

Keywords: cartel, price fixing, overcharge, antitrust, optimal deterrence

JEL Classification: L12, L42, K22, B14, F29

Suggested Citation

Connor, John M., Price Fixing Overcharges: Revised 2nd Edition (April 27, 2010). Available at SSRN: https://ssrn.com/abstract=1610262 or http://dx.doi.org/10.2139/ssrn.1610262

John M. Connor (Contact Author)

American Antitrust Institute (AAI) ( email )

1730 Rhode Island Avenue, NW
Suite 1100
Washington, DC 20036
United States
202-536-3408 (Phone)

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

Paper statistics

Downloads
707
Rank
29,137
Abstract Views
2,784