Comment on Crandall and Winston

In a paper published in the Journal of Economic Perspectives in the fall of 2003, Robert Crandall and Clifford Winston all but call for the repeal of the Nation’s antitrust laws. Their qualifications to make such a radical proposal are in doubt, but more importantly their purported review of empirical studies of overt price-fixing effects is shallow, biased, and naïve. Crandall and Winston’s assertion that the direct benefits of convicting pricefixers are slight is central to their paper’s thesis. Their review is shallow because the five studies that they examine comprise less than 2% of the economic literature that quantitatively estimates the price effects of explicit price-fixing schemes; it is biased because the chosen studies find no or weak price effects, whereas the vast majority of such studies find significant positive effects on price during the collusive period; it is naïve because the selected studies are either severely flawed or irrelevant.