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The Distribution of Harm in Price-Fixing Cases

Author

Listed:
  • Boone, J.

    (Tilburg University, School of Economics and Management)

  • Müller, W.

    (Tilburg University, School of Economics and Management)

Abstract

We consider a vertically related industry and analyze how the total harm due to a price increase upstream is distributed over downstream firms and final consumers. For this purpose, we develop a general model without making specific assumptions regarding demand, costs, or the mode of competition. We consider both the case of homogeneous and differentiated goods markets. Furthermore, we discuss data requirements and suggest explicit formulas and regression specifications that can be used to estimate the relevant terms in the harm distribution in practice, even if elevated upstream prices are rather constant over time. The latter can be achieved by considering perturbations of the demand curve. This in turn can be used to construct a supply curve for the case of imperfect competition that includes perfect competition and monopoly as special cases. Finally, we illustrate how basic intuition from the tax incidence literature carries over to the distribution of harm.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Boone, J. & Müller, W., 2008. "The Distribution of Harm in Price-Fixing Cases," Other publications TiSEM 4902e2bb-47cb-4922-b4c8-6, Tilburg University, School of Economics and Management.
    • Handle: RePEc:tiu:tiutis:4902e2bb-47cb-4922-b4c8-64da5a8bb806
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    Cited by:

    1. Basso, Leonardo J. & Ross, Thomas W., 2019. "On the harm from mergers in input markets," Economics Letters, Elsevier, vol. 178(C), pages 70-76.
    2. Luke Garrod & Tien-Der Han & James Harvey & Matthew Olczak, 2025. "Cartel Damages Claims, Passing-On, and Passing-Back," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 66(3), pages 261-292, March.
    3. Bet, Germán & Cui, Shana & Sappington, David E.M., 2021. "The impact of vertical integration on losses from collusion," International Journal of Industrial Organization, Elsevier, vol. 77(C).
    4. FRANK VERBOVEN & THEON van DIJK, 2009. "Cartel Damages Claims And The Passing‐On Defense," Journal of Industrial Economics, Wiley Blackwell, vol. 57(3), pages 457-491, September.
    5. Doose, Anna Maria, 2013. "Methods for calculating cartel damages: A survey," Ilmenau Economics Discussion Papers 83, Ilmenau University of Technology, Institute of Economics.

    More about this item

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts

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