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The distribution of harm in price-fixing cases

Author

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  • Boone, Jan
  • Müller, Wieland
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, and illustrate how basic intuition from the tax incidence literature carries over to the distribution of harm. 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.

Suggested Citation

  • Boone, Jan & Müller, Wieland, 2012. "The distribution of harm in price-fixing cases," International Journal of Industrial Organization, Elsevier, vol. 30(2), pages 265-276.
    • Handle: RePEc:eee:indorg:v:30:y:2012:i:2:p:265-276
    DOI: 10.1016/j.ijindorg.2011.11.002
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    Cited by:

    1. 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.
    2. Basso, Leonardo J. & Ross, Thomas W., 2019. "On the harm from mergers in input markets," Economics Letters, Elsevier, vol. 178(C), pages 70-76.
    3. Garrod, Luke & Han, Tien-Der Jerry & Harvey, James & Olczak, Matthew, 2023. "Cartel Damages Claims, Passing-On and Passing-Back," MPRA Paper 116471, University Library of Munich, Germany.
    4. 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).
    5. Doose, Anna Maria, 2013. "Methods for calculating cartel damages: A survey," Ilmenau Economics Discussion Papers 83, Ilmenau University of Technology, Institute of Economics.

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    More about this item

    Keywords

    Cartel; Abuse of a dominant position; Pass-on defence; Supply curve; Apportionment of harm; Tax incidence;
    All these keywords.

    JEL classification:

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

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