A merger approach to cartel overcharge analysis

Bertram Neurohr

Economics Letters, 2018, vol. 168, issue C, 28-30

Abstract: To the extent that cartels are effective at maximizing joint profits, they are akin to multi-firm mergers. This paper draws from merger analysis — in particular upward pricing pressure — to construct a model of cartel overcharges. For practitioners, this approach has the benefit that it strikes an appropriate balance between simplicity and flexibility. Moreover, it relies mostly on data on margins and diversion ratios and can thus be used as either a complement or alternative to empirical approaches based, for example, on historical price data.

Keywords: Cartels; Upward pricing pressure; Pass-through; Cartel overcharges; Umbrella effects (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:168:y:2018:i:c:p:28-30

DOI: 10.1016/j.econlet.2018.03.032

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