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Empirica

, Volume 38, Issue 3, pp 389–415 | Cite as

Empirical methods in the analysis of collusion

  • Johannes PahaEmail author
Original Paper

Abstract

Regression methods are commonly used in competition lawsuits for, e.g., determining overcharges in price-fixing cases. Technical evaluations of these methods’ pros and cons are not necessarily intuitive. Appraisals that are based on case studies are descriptive but need not be universally valid. This paper opens up the black box called econometrics for competition cases. This is done by complementing theoretical arguments with estimation results. These results are obtained for data that is generated by a simulation-model of a collusive industry. Using such data leaves little room for debate about the quality of these methods because estimates of, e.g., overcharges can be compared to their true underlying values. This analysis provides arguments for demonstrating that thoroughly conducted econometric analyses yield better results than simple techniques such as before-and-after comparisons.

Keywords

Collusion Empirical methods Industry simulation 

JEL classification

C51 D43 K21 L41 

Notes

Acknowledgments

I would like to thank Oliver Budzinski, Henning Fischer, Georg Götz, Maarten Janssen, Peter Winker, my colleagues in Giessen, and the participants of the 35th Hohenheimer Oberseminar for their valuable comments on this paper.

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Copyright information

© Springer Science+Business Media, LLC. 2011

Authors and Affiliations

  1. 1.Chair for Industrial Organization, Regulation and Antitrust (VWL 1), Justus-Liebig-University GiessenGiessenGermany

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