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Post-Cartel Pricing During Litigation


  • Joseph E. Harrington


Standard methods in the U.S. for calculating antitrust damages in price-fixing cases are shown to create a strategic incentive for firms to price above the non-collusive price after the cartel has been dissolved. This results in an overestimate of the but for price and an underestimate of the level of damages. The extent of this upward bias in the but for price is greater, the longer the cartel was in place and the more concentrated the industry. Copyright Blackwell Publishing Ltd. 2004.

Suggested Citation

  • Joseph E. Harrington, 2004. "Post-Cartel Pricing During Litigation," Journal of Industrial Economics, Wiley Blackwell, vol. 52(4), pages 517-533, December.
  • Handle: RePEc:bla:jindec:v:52:y:2004:i:4:p:517-533

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    References listed on IDEAS

    1. John M. Connor, 2000. "Archer Daniels Midland:Price Fixer To The World," Working Papers 00-11, Purdue University, College of Agriculture, Department of Agricultural Economics.
    2. John M. Connor, 1998. "What Can We Learn From The Adm Global Price Conspiracies?," Working Papers 98-14, Purdue University, College of Agriculture, Department of Agricultural Economics.
    3. Bryant, Peter G & Eckard, E Woodrow, Jr, 1991. "Price Fixing: The Probability of Getting Caught," The Review of Economics and Statistics, MIT Press, vol. 73(3), pages 531-536, August.
    4. Xavier Vives, 2001. "Oligopoly Pricing: Old Ideas and New Tools," MIT Press Books, The MIT Press, edition 1, volume 1, number 026272040x, January.
    5. Robert H. Porter & J. Douglas Zona, 1999. "Ohio School Milk Markets: An Analysis of Bidding," RAND Journal of Economics, The RAND Corporation, vol. 30(2), pages 263-288, Summer.
    6. Lawrence White, 2001. "Lysine and Price Fixing: How Long? How Severe?," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 18(1), pages 23-31, February.
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