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How Much Do Cartel Overcharge?

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  • Marcel Boyer

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  • Rachidi Kotchoni

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Abstract

Connor and Lande (Issues in competition law and policy, pp 2203–2218, 2008 ) conducted a survey of cartels and found a mean overcharge estimate in the range of 31–49 %. By examining more sources, Connor (Price-fixing overcharges, 2nd edn. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1610262 , 2010 ) finds a mean of 50.4 % for successful cartels. However, the data that are used in those studies are estimates that are obtained from different methodologies, sources, and contexts rather than from direct observation. We conduct a meta-analysis of cartel overcharge estimates that provides a sound treatment of these matters and other data problems. We find a bias-corrected mean and median overcharge estimate of 15.47 and 16.01 %. Our results have significant antitrust policy implications. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • Marcel Boyer & Rachidi Kotchoni, 2015. "How Much Do Cartel Overcharge?," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 47(2), pages 119-153, September.
  • Handle: RePEc:kap:revind:v:47:y:2015:i:2:p:119-153
    DOI: 10.1007/s11151-015-9472-1
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    References listed on IDEAS

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    1. repec:taf:ijecbs:v:24:y:2017:i:3:p:329-338 is not listed on IDEAS
    2. Marcel Boyer & Anne Catherine Faye & Rachidi Kotchoni, 2017. "Challenges and Pitfalls in Cartel Policy and Fining," CIRANO Working Papers 2017s-20, CIRANO.
    3. Matthias Firgo & Agnes Kügler, 2014. "Ski Networks and their Effects on Pricing in Austrian Skiing Regions," WIFO Monatsberichte (monthly reports), WIFO, vol. 87(12), pages 851-862, December.
    4. repec:eee:jeborg:v:145:y:2018:i:c:p:530-545 is not listed on IDEAS
    5. World Bank Group, 2016. "South Africa Economic Update, February 2016," World Bank Other Operational Studies 23762, The World Bank.
    6. Katsoulacos, Yannis & Motchenkova, Evgenia & Ulph, David, 2015. "Penalizing cartels: The case for basing penalties on price overcharge," International Journal of Industrial Organization, Elsevier, vol. 42(C), pages 70-80.
    7. Marcel Boyer & Rachidi Kotchoni, 2015. "How Much Do Cartel Overcharge? (The "Working Paper" Version)," CIRANO Working Papers 2015s-37, CIRANO.

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