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Estimating consumer damages in cartel cases

Ulrich Laitenberger and Florian Smuda

No 13-069, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: We use consumer panel data to calculate the damage suffered by German consumers due to a detergent cartel that was active between 2002 and 2005 in eight European countries. Applying before-and-after and difference-in-differences estimations we find average overcharges between 6.7 and 6.9 percent and an overall consumer damage of about 13.2 million Euro over the period from July 2004 until March 2005. Under the assumptions that the cartel-induced share on turnover is representative for the entire cartel period and all affected markets, the overall consumer damage would even sum up to about 315 million Euro. Our results further suggest that the retailers reacted to the price increases of the cartel firms via price increases for their own detergent products, resulting in significant umbrella effects. We quantify the damage due to this umbrella pricing to a total of about 7.34 million Euro. With respect to the discussion whether special procedures for bringing collective actions should be available in the EU, our results are important to the extent that we show how consumer associations can use consumer panel data in order to claim damages before national courts and thereby actively fulfill their mandate of consumer protection.

Keywords: cartels; damages; consumers; detergents; private damage claims (search for similar items in EconPapers)
JEL-codes: L13 L41 L44 (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-com, nep-eur and nep-mkt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Journal Article: ESTIMATING CONSUMER DAMAGES IN CARTEL CASES (2015) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:13069

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