Measuring the True Harm from Price-Fixing to Both Direct and Indirect Purchasers

33 Pages Posted: 30 Dec 2010

See all articles by Leonardo J. Basso

Leonardo J. Basso

Universidad de Chile - Civil Engineering Department

Thomas W. Ross

University of British Columbia (UBC)

Multiple version iconThere are 2 versions of this paper

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

Basso, Leonardo J. and Ross, Thomas W., Measuring the True Harm from Price-Fixing to Both Direct and Indirect Purchasers (December 24, 2010). The Journal of Industrial Economics, Vol. 58, Issue 4, pp. 895-927, 2010. Available at SSRN: https://ssrn.com/abstract=1732396 or http://dx.doi.org/10.1111/j.1467-6451.2010.00437.x

Leonardo J. Basso (Contact Author)

Universidad de Chile - Civil Engineering Department ( email )

Casilla 228-3
Santiago
Chile
56 2 978 4380 (Phone)
56 2 689 4206 (Fax)

HOME PAGE: http://tamarugo.cec.uchile.cl/~dicidet/leo.html

Thomas W. Ross

University of British Columbia (UBC) ( email )

2329 West Mall
Vancouver, British Columbia BC V6T 1Z4
Canada

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