Cartel Dating

Tinbergen Institute Discussion Paper 16-092/VII

58 Pages Posted: 1 Nov 2016

See all articles by H. Peter Boswijk

H. Peter Boswijk

Amsterdam School of Economics; Tinbergen Institute

Maurice J. G. Bun

University of Amsterdam (UVA) - Department of Quantitative Economics; Tinbergen Institute

Maarten Pieter Schinkel

University of Amsterdam - Department of Economics; Tinbergen Institute

Multiple version iconThere are 2 versions of this paper

Date Written: October 31, 2016

Abstract

The begin and end dates of cartels are often ambiguous, despite competition authorities stating them with precision. The legally established infringement period(s), based on documentary evidence, need not coincide with the period(s) of actual cartel effects. In this paper, we show that misdating cartel effects leads to a (weak) overestimation of but-for prices and an underestimation of overcharges. Total overcharges based on comparing but-for prices to actual prices are a (weak) underestimation of the true amount overcharged, irrespective of the type and size of the misdating. The bias in antitrust damage estimation based on predicted cartel prices can have either sign. We extend the before-during-and-after method with an empirical cartel dating procedure that uses multiple structural break tests to determine the actual begin and end date(s) of the effects of collusive agreements. Empirical findings in the European Sodium Chlorate cartel corroborate our theoretical results.

Keywords: Cartel, antitrust damages, dates, structural change, break test, but-for

JEL Classification: C22, C51, L41

Suggested Citation

Boswijk, H. Peter and Bun, Maurice J. G. and Schinkel, Maarten Pieter, Cartel Dating (October 31, 2016). Tinbergen Institute Discussion Paper 16-092/VII, Available at SSRN: https://ssrn.com/abstract=2862340 or http://dx.doi.org/10.2139/ssrn.2862340

H. Peter Boswijk (Contact Author)

Amsterdam School of Economics ( email )

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Tinbergen Institute ( email )

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Maurice J. G. Bun

University of Amsterdam (UVA) - Department of Quantitative Economics ( email )

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+31-20-5254257 (Phone)

Tinbergen Institute ( email )

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Maarten Pieter Schinkel

University of Amsterdam - Department of Economics ( email )

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+31 20 525 5318 (Fax)

Tinbergen Institute ( email )

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