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Cartel Overcharges and the Deterrent Effect of EU Competition Law

31 Pages Posted: 29 Jul 2012  

Florian Smuda

Centre for European Economic Research (ZEW)

Date Written: 2012

Abstract

This paper examines cartel overcharges for the European market. Using a sample of 191 overcharge estimates and several parametric and semi-parametric estimation procedures, the impact of different cartel characteristics and the market environment on the magnitude of overcharges is analyzed. The mean and median overcharge rates are found to be 20.70 percent and 18.37 percent of the selling price and the average cartel duration is 8.35 years. Certain cartel characteristics and the geographic region of cartel operation influence the level of overcharges considerably. Furthermore, empirical evidence suggests that the currently existing fine level of the EU Guidelines is too low to achieve optimal deterrence.

Keywords: cartels, overcharges, Europe, fines, deterrence, damages

JEL Classification: L13, L41, L44

Suggested Citation

Smuda, Florian, Cartel Overcharges and the Deterrent Effect of EU Competition Law (2012). ZEW - Centre for European Economic Research Discussion Paper No. 12-050. Available at SSRN: https://ssrn.com/abstract=2118566 or http://dx.doi.org/10.2139/ssrn.2118566

Florian Smuda (Contact Author)

Centre for European Economic Research (ZEW) ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

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