Search results

Many jurisdictions fine illegal cartels using penalty guidelines that presume an arbitrary 10% overcharge. This article surveys more than 700 published economic studies and judicial decisions that contain 2,041 quantitative estimates of overcharges of hard-core cartels. The primary findings are: (1) the median average long-run overcharge for all types of cartels over all time periods is 23.0%; (2) the mean average is at least 49%; (3) overcharges reached their zenith in 1891–1945 and have trended downward ever since; (4) 6% of the cartel episodes are zero; (5) median overcharges of international-membership cartels are 38% higher than those of domestic cartels; (6) convicted cartels are on average 19% more effective at raising prices as unpunished cartels; (7) bid-rigging conduct displays 25% lower markups than price-fixing cartels; (8) contemporary cartels targeted by class actions have higher overcharges; and (9) when cartels operate at peak effectiveness, price changes are 60–80% higher than the whole episode. Historical penalty guidelines aimed at optimally deterring cartels are likely to be too low.

The purpose of this paper is to examine the practical and legal challenges and barriers to the development of a private action in antitrust controls and to project those onto a consideration of the development of such rights of action through a case study of Brazil.

The paper provides a critical review of both the theoretical and practical barriers to the development of private rights of action, drawing upon the history of development in both the USA and in Europe and the regular considerations of policy and law making, through debate at the Organisation for Economic Co‐operation and Development. This comparative and historical analysis is projected into models of design and delivery for consideration by law makers.

Despite the different legal traditions and policy considerations of the different jurisdictions, the fundamental design of a common action pan‐jurisdictions and outwith conflict of law principles might be possible. The paper proposes a design framework to facilitate and achieve this. The case‐study of Brazil presents an interesting and recent context, and illustration, of this process.

The paper provides an historical and comparative account of the development of private rights actions in this area and provides, to the law maker, a framework and set of legal principles and practical enforcement and design guidelines. This framework and its guidelines should assist those countries seeking to introduce such rights of action in the policy area of antitrust control.

The historical and comparative approach draws together in one paper a contemporary global position in this area of law development.

Punitive damages is a controversial topic in the legal profession and in the field of economics. This chapter explores the economics of punitive damages as they relates to corporate defendants. The economic difference between large corporations and other potential defendants, such as individuals or smaller closely held companies, causes the effects of a punitive award to be different. In some circumstances, these differences raise significant questions as to the appropriateness of punitive damages when imposed on large corporations.

This paper surveys published economic studies and judicial decisions that contain 1,040 quantitative estimates of overcharges of hard-core cartels. The primary finding is that the median long-run overcharge for all types of cartels over all time periods is 25.0%:18.8% for domestic cartels and 31.0% for international cartels. Cartel overcharges are positively skewed, pushing the mean overcharge for all successful cartels to 43.4%. Convicted cartels are on average as equally effective at raising prices as unpunished cartels, but bid-rigging conduct does display somewhat lower mark-ups than price-fixing cartels. These findings suggest that optimal deterrence requires that monetary penalties ought to be increased.

Traditional tort law does not allow a victim of exposure to a toxic substance to seek damages without evidence of actual loss. Given the difficulty of collecting damages after a long latency period, however, we examine the desirability of granting exposure victims an independent cause of action for medical monitoring at the time of exposure. We show that such a cause of action is not necessary to induce victims to invest in efficient monitoring. It can, however, increase incentives for injurer care, but only at the cost of greater litigation costs. The general reluctance of courts to adopt a cause of action reflects their recognition of this trade-off.

The Bureau of Economics in the Federal Trade Commission has a three-part role in the Agency and the strength of its functions changed over time depending on the preferences and ideology of the FTC’s leaders, developments in the field of economics, and the tenor of the times. The over-riding current role is to provide well considered, unbiased economic advice regarding antitrust and consumer protection law enforcement cases to the legal staff and the Commission. The second role, which long ago was primary, is to provide reports on investigations of various industries to the public and public officials. This role was more recently called research or “policy R&D”. A third role is to advocate for competition and markets both domestically and internationally. As a practical matter, the provision of economic advice to the FTC and to the legal staff has required that the economists wear “two hats,” helping the legal staff investigate cases and provide evidence to support law enforcement cases while also providing advice to the legal bureaus and to the Commission on which cases to pursue (thus providing “a second set of eyes” to evaluate cases). There is sometimes a tension in those functions because building a case is not the same as evaluating a case. Economists and the Bureau of Economics have provided such services to the FTC for over 100 years proving that a sub-organization can survive while playing roles that sometimes conflict. Such a life is not, however, always easy or fun.