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Cartel Dating

Listed author(s):
  • H. Peter Boswijk

    (University of Amsterdam, The Netherlands)

  • Maurice J.G. Bun

    (University of Amsterdam, The Netherlands)

  • Maarten Pieter Schinkel

    (University of Amsterdam, The Netherlands)

Registered author(s):

    The begin and end dates of cartels are often ambiguous, despite competition authorities stating them with precision. The legally established infringement period(s), based on documentary evidence, need not coincide with the period(s) of actual cartel effects. In this paper, we show that misdating cartel effects leads to a (weak) overestimation of but-for prices and an underestimation of overcharges. Total overcharges based on comparing but-for prices to actual prices are a (weak) underestimation of the true amount overcharged, irrespective of the type and size of the misdating. The bias in antitrust damage estimation based on predicted cartel prices can have either sign. We extend the before-during-and-after method with an empirical cartel dating procedure that uses multiple structural break tests to determine the actual begin and end date(s) of the effects of collusive agreements. Empirical findings in the European Sodium Chlorate cartel corroborate our theoretical results.

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    File URL: http://papers.tinbergen.nl/16092.pdf
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    Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 16-092/VII.

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    Date of creation: 01 Nov 2016
    Handle: RePEc:tin:wpaper:20160092
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    1. Hüschelrath, Kai & Müller, Kathrin & Veith, Tobias, 2012. "Concrete shoes for competition: The effect of the German cement cartel on market price," ZEW Discussion Papers 12-035, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    2. Laitenberger, Ulrich & Smuda, Florian, 2013. "Estimating consumer damages in cartel cases," ZEW Discussion Papers 13-069, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    3. Marshall, Robert C. & Marx, Leslie M., 2012. "The Economics of Collusion: Cartels and Bidding Rings," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262017326, December.
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