How Much Do Cartel Overcharge?
Published online: 7 August 2015
Ó Springer Science+Business Media New York 2015
Abstract Connor and Lande (Issues in competition law and policy, pp 2203–2218,
2008) conducted a survey of cartels and found a mean overcharge estimate in the
range of 31–49 %. By examining more sources, Connor (Price-ﬁxing overcharges,
2nd edn. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1610262, 2010) ﬁnds a
mean of 50.4 % for successful cartels. However, the data that are used in those
studies are estimates that are obtained from different methodologies, sources, and
contexts rather than from direct observation. We conduct a meta-analysis of cartel
overcharge estimates that provides a sound treatment of these matters and other data
problems. We ﬁnd a bias-corrected mean and median overcharge estimate of 15.47
and 16.01 %. Our results have signiﬁcant antitrust policy implications.
Keywords Antitrust Á Cartel overcharges Á Heckman correction Á Kullback–
Leibler divergence Á Meta-analysis
Preliminary versions of this paper circulated as working papers under the titles ‘‘The Econometrics of
Cartel Overcharge’’ and ‘‘How Much Do Cartels Typically Overcharge?’’
& Rachidi Kotchoni
Toulouse School of Economics, CIRANO, Universite
al, 1400-1130 Sherbrooke St.
West, Montreal, QC H3A 2M8, Canada
African School of Economics, 02BP372 Cotonou, Benin
Rev Ind Organ (2015) 47:119–153