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The Law and Economics of List Price Collusion

Author

Listed:
  • Willem Boshoff

    () (Stellenbosch University)

  • Johannes Paha

    () (Justus-Liebig-University Giessen)

Abstract

Firms sometimes violate competition laws by agreeing on increases of list prices. The economic effects of such list price collusion are far from clear because the cartel firms might deviate secretly from the elevated prices by granting their customers discounts. This article presents case evidence suggesting that agreements on list prices are not infrequently observed in cartel cases. It also reviews theoretical, empirical, and experimental literature in economics showing under what conditions such list price collusion causes the discounted transaction prices to rise. This is relevant for competition authorities in developing a theory of harm when prosecuting cartels, and also for the customers of the cartel firms when suing the conspirators for the repayment of damages.

Suggested Citation

  • Willem Boshoff & Johannes Paha, 2017. "The Law and Economics of List Price Collusion," MAGKS Papers on Economics 201740, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
  • Handle: RePEc:mar:magkse:201740
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    File URL: http://www.uni-marburg.de/fb02/makro/forschung/magkspapers/paper_2017/40-2017_paha.pdf
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    More about this item

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices

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