Review of Industrial Organization

, Volume 18, Issue 1, pp 45–52

Beyond Illinois Brick: The Law and Economics of Cost Pass-Through in the ADM Price Fixing Case

  • Ronald Cotterill
  • Leonard Egan
  • William Buckhold
Article

Abstract

This article reviews the legal standards and theeconomics of pass-through to indirect purchasers andillustrates these principles with a case involving ADMin the market for high fructose corn syrup (HFCS).With three assumptions about production technologies,buyers of HFCS experience a 100 percent pass throughof the direct overcharge. The extent of pass throughof the increase by buyers is shown to dependcritically upon the market structure of the purchasingindustry and the shape of the retail demand curve. Flexible demand functional forms are needed to avoidconstraining estimated pass through rates.

High fructose corn syrup Illinois Brick indirect overcharges pass-through of injuries price fixing 

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Copyright information

© Kluwer Academic Publishers 2001

Authors and Affiliations

  • Ronald Cotterill
    • 1
  • Leonard Egan
    • 1
  • William Buckhold
    • 1
  1. 1.U-21, Food Marketing Policy CenterUniversity of ConnecticutStorrsU.S.A.

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