Advanced Search
MyIDEAS: Login

Econometric Damage Estimation from the Bid Rigging in the Korean Military Oil Procurement Auctions during 1998-2000 [in Japanese]

Contents:

Author Info

  • Sonku Kim
  • Inkwon Lee
  • Keunkwan Ryu
  • Sang-Seung Yi

Abstract

In October 2000, the Korean Fair Trade Commission levied a combined surcharge of 190 billion Korean won (roughly $170 million) against the five major oil refineries in Korea for colluding in the military oil procurement auctions between 1998 and 2000. At the time, it was a record surcharge ever imposed by the KFTC since its establishment in 1981. Based on this ruling, in February 2001, the Korean Ministry of Defense filed a civil law suit against the 5 oil companies asking for damage redemption of 158.4 billion Korean won (out of a total purchase payment of 712.8 billion Korean won). The Seoul Civil District Court commissioned the Center for Corporate Competitiveness at Seoul National University to assess the damages. This paper is a summary of our findings. In particular, we have applied gdifference in differenceh techniques to estimate the damage amount using micro level panel data covering military and nonmilitary oil procurement auctions for the period 1995-2002. In 2007, the district court largely based its damage award of about 90 billion Korean Won on our implementation of the gdifference in differenceh estimation method. However, in 2009 Seoul High Court rejected the district court's ruling in favor of a crude gyardstickh estimate of roughly 140 billion Korean Won based on the spot prices in the Singapore market. The Seoul High Court argued that it rejected econometric damage estimates because of the huge differences in damage estimates of the the Court-appointed experts (112 billion Korean Won) and those of the experts by commissioned by the defendants (12 billion Korean Won). We compare different assumptions, models, estimation techniques, and see how the estimated damage amounts change. In particular, we argue that the Seoul High Court made the critical error of not distinguishing between the idea of gdifference in differenceh method (on which both groups of experts agreed as the proper estimation method) and the econometric implementation (which lay judges may have a hard time to understand).

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://gcoe.ier.hit-u.ac.jp/research/discussion/2008/pdf/gd09-121.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Institute of Economic Research, Hitotsubashi University in its series Global COE Hi-Stat Discussion Paper Series with number gd09-121.

as in new window
Length:
Date of creation: Mar 2010
Date of revision:
Handle: RePEc:hst:ghsdps:gd09-121

Contact details of provider:
Postal: 2-1 Naka, Kunitachi City, Tokyo 186
Phone: +81-42-580-8327
Fax: +81-42-580-8333
Email:
Web page: http://www.ier.hit-u.ac.jp/
More information through EDIRC

Related research

Keywords:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:hst:ghsdps:gd09-121. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Tatsuji Makino).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.