Buyers’ Cartels: Prevalence and Undercharges

Abstract

This article supplements information on 24 U.S. domestic buyers’ cartels cited in a 2010 book by Blair and Harrison by assembling and analyzing a sample of 49 episodes of buyers’ cartels that have international membership or multi-jurisdictional price effects. It appears that such cartels comprise less than 8 percent of the total, that they are clustered in primary-products and services industries, that they employ bid rigging conduct to a greater extent than sellers’ cartels, and that undercharges average close to 20 percent of the but-for price. These quantitative characteristics are supplemented by sketches of the conduct and prosecutions of a few of the better-documented cases of buyers’ cartels.

Keywords: buyers' cartels, price effects, undercharges, antitrust

JEL Classification: K21, L13, L41, L44