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Factors influencing the magnitude of cartel overcharges: An empirical analysis of food-industry cartels

Author

Listed:
  • Yuliya Bolotova

    (Department of Agricultural Economics and Rural Sociology, University of Idaho, Moscow, ID 83844-2337)

  • John M. Connor

    (Department of Agricultural Economics, Purdue University, West Lafayette, IN 47907-2056)

  • Douglas J. Miller

    (Department of Economics, University of Missouri, Columbia, MO 65211-6040)

Abstract

Using overcharge estimates for 395 cartel episodes from the 18 th to the 21 st century, we evaluate the impact of cartel characteristics on the size of overcharges imposed by cartels across several geographic regions and antitrust law regimes. The results of our study have important policy implications. We find that the average overcharge imposed by cartels in our sample is 19 percent with the median of 16 percent of the selling price. Food industry cartels achieve lower overcharges than domestic cartels. Longer cartel episodes generate higher levels of overcharges. Cartels that were found or pled guilty achieve approximately the same levels of overcharges as legal cartels. [JEL classifications: L1, L2, L4, L6]. © 2007 Wiley Periodicals, Inc. Agribusiness 23: 17-33, 2007.

Suggested Citation

  • Yuliya Bolotova & John M. Connor & Douglas J. Miller, 2007. "Factors influencing the magnitude of cartel overcharges: An empirical analysis of food-industry cartels," Agribusiness, John Wiley & Sons, Ltd., vol. 23(1), pages 17-33.
    • Handle: RePEc:wly:agribz:v:23:y:2007:i:1:p:17-33
    DOI: 10.1002/agr.20111
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    References listed on IDEAS

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    1. repec:cup:cbooks:9780521623940 is not listed on IDEAS
    2. John M. Connor, 2004. "Global Antitrust Prosecutions of Modern International Cartels," Journal of Industry, Competition and Trade, Springer, vol. 4(3), pages 239-267, September.
    3. Dick, Andrew R, 1996. "When Are Cartels Stable Contracts?," Journal of Law and Economics, University of Chicago Press, vol. 39(1), pages 241-283, April.
    4. John M. Connor, 1998. "The global citric acid conspiracy: Legal-economic lessons," Agribusiness, John Wiley & Sons, Ltd., vol. 14(6), pages 435-452.
    5. Asch, Peter & Seneca, J J, 1976. "Is Collusion Profitable?," The Review of Economics and Statistics, MIT Press, vol. 58(1), pages 1-12, February.
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    Cited by:

    1. Florian Smuda, 2014. "Cartel Overcharges And The Deterrent Effect Of Eu Competition Law," Journal of Competition Law and Economics, Oxford University Press, vol. 10(1), pages 63-86.
    2. Frank Maier-Rigaud & Ulrich Schwalbe, 2013. "Quantification of Antitrust Damages," Working Papers 2013-ECO-09, IESEG School of Management.
    3. Aura María García Pabón, editor & Ana María Pérez Herrán, editor & Ismael Beltrán Prado, editor, 2019. "Competencia económica : reflexiones sobre los diez años de la Ley 1340 de 2009," Books, Universidad Externado de Colombia, Facultad de Economía, number 80, htpr_v3_i.
    4. Bolotova, Yuliya, 2015. "Agricultural Production Restrictions and Market Power: An Antitrust Analysis," 2015 Annual Meeting, January 31-February 3, 2015, Atlanta, Georgia 196848, Southern Agricultural Economics Association.
    5. Bolotova, Yuliya V., 2009. "Cartel overcharges: An empirical analysis," Journal of Economic Behavior & Organization, Elsevier, vol. 70(1-2), pages 321-341, May.
    6. Hoekman, Bernard & Martin, Will, 2012. "Reducing distortions in international commodity markets : an agenda for multilateral cooperation," Policy Research Working Paper Series 5928, The World Bank.
    7. Symeonidis, George, 2018. "Collusion, profitability and welfare: Theory and evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 145(C), pages 530-545.
    8. Gregory Werden, 2008. "Assessing the Effects of Antitrust Enforcement in the United States," De Economist, Springer, vol. 156(4), pages 433-451, December.
    9. Panayiotis Agisilaou, 2013. "Collusion in Industrial Economics and Optimally Designed Leniency Programmes - A Survey," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2013-03, Centre for Competition Policy, University of East Anglia, Norwich, UK..
    10. Bolotova, Yuliya, 2014. "Agricultural Supply Management and Antitrust in the United States System of Agribusiness," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 17(3), pages 1-24, September.

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    More about this item

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • L4 - Industrial Organization - - Antitrust Issues and Policies
    • L6 - Industrial Organization - - Industry Studies: Manufacturing

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