Price-fixing Overcharges: Legal and Economic Evidence

John M. Connor

A chapter in Research in Law and Economics, 2007, pp 59-153 from Emerald Group Publishing Limited

Abstract: This paper surveys published economic studies and judicial decisions that contain 1,040 quantitative estimates of overcharges of hard-core cartels. The primary finding is that the median long-run overcharge for all types of cartels over all time periods is 25.0%:18.8% for domestic cartels and 31.0% for international cartels. Cartel overcharges are positively skewed, pushing the mean overcharge for all successful cartels to 43.4%. Convicted cartels are on average as equally effective at raising prices as unpunished cartels, but bid-rigging conduct does display somewhat lower mark-ups than price-fixing cartels. These findings suggest that optimal deterrence requires that monetary penalties ought to be increased.

Date: 2007
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Persistent link: https://EconPapers.repec.org/RePEc:eme:rlwezz:s0193-5895(06)22004-9

DOI: 10.1016/S0193-5895(06)22004-9

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