IDEAS home Printed from https://ideas.repec.org/a/kap/revind/v66y2025i3d10.1007_s11151-024-09991-9.html
   My bibliography  Save this article

Cartel Damages Claims, Passing-On, and Passing-Back

Author

Listed:
  • Luke Garrod

    (Loughborough University
    Economic Insight Ltd.)

  • Tien-Der Han

    (Loughborough University)

  • James Harvey

    (Economic Insight Ltd.)

  • Matthew Olczak

    (Aston University)

Abstract

Firms can mitigate the harm of an input cartel by passing on some of the higher cost to their customers by raising their own prices. Recent damages claims have highlighted that firms may also respond by reducing the prices that are paid to their suppliers of complementary inputs; the firm thereby passes back some harm upstream. To provide guidance for practitioners as to how such effects together affect the division of the harm, we derive the equilibrium ‘passing-on’ and ‘passing-back’ effects in a successive oligopolies model where one of two inputs is cartelised. We show that the passing-back effect is larger when there is greater market power in the complementary input sector. This reduces the passing-on effect. The complementary input suppliers can incur substantial harm, and the harm that is inflicted on the cartel’s direct and/or indirect purchasers can thereby be reduced.

Suggested Citation

  • 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.
  • Handle: RePEc:kap:revind:v:66:y:2025:i:3:d:10.1007_s11151-024-09991-9
    DOI: 10.1007/s11151-024-09991-9
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11151-024-09991-9
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.

    File URL: https://libkey.io/10.1007/s11151-024-09991-9?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Damages; Cartel overcharge; Cost pass-through; Vertically related markets;
    All these keywords.

    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
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:revind:v:66:y:2025:i:3:d:10.1007_s11151-024-09991-9. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.