Measuring the True Harm from Price-Fixing to Both Direct and Indirect Purchasers
33 Pages Posted: 30 Dec 2010
There are 2 versions of this paper
Measuring the True Harm from Price-Fixing to Both Direct and Indirect Purchasers
Date Written: December 24, 2010
Abstract
Legal actions by direct and indirect purchasers to recover damages from price-fixing, common in the United States for years, are now appearing in a number of other countries. Traditional measures of damages are flawed as measures of the true harm suffered and will often significantly understate that true harm. This paper provides measures of the degree of understatement of the true harm when traditional approaches are used and shows how the size of the error depends on the degree of competitiveness of downstream markets. The paper also provides measures of distribution of the true harm between direct and indirect purchasers.
Keywords: antitrust damages, price fixing, cartels, pass-through
JEL Classification: L41, L42, K21
Suggested Citation: Suggested Citation
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Measuring the True Harm from Price-Fixing to Both Direct and Indirect Purchasers
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