Post-Cartel Pricing during Litigation
Standard methods in the U.S. for calculating antitrust damages in price-fixing cases is shown to create a strategic incentive for firms to price above the non-collusive price after the cartel has 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 is the industry.
|Date of creation:||Dec 2002|
|Date of revision:||Jun 2003|
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NBER Working Papers
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99-02, New York University, Leonard N. Stern School of Business, Department of Economics.
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