Economic & Legal Analysis of Collusion

Collusion, whether in an explicit (e.g. cartels) or tacit form (e.g. price suppression in an auction), has become a prime target of antitrust and competition policy enforcement activities. Authorities have been not only imposed large fines but have also handed out prison sentences. It is crucial that antitrust professionals understand the market characteristics which are conducive to collusion, the economic benefits gained by the participants and the subsequent inefficiency losses that result from their activities.

This course provides a current and concise summary of collusion, using simple economic models, case studies and an overview of enforcement activity. The course was primarily designed for lawyers and antitrust professionals. We address ideas at the forefront of economics in such a way that the material is clear and accessible to non-economists. Familiarity with microeconomics at the level of an introductory college level course will be presumed.

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Suggested Reading

Global Cartels Redux: The Amino Acid Lysine Antitrust Litigation (1996), THE ANTITRUST REVOLUTION, 4th Edition, John E. Kwoka and Lawrence White (editors), Oxford: Oxford University Press (2004)

P. Bajari and J. Yeo, Auction Design and Tacit Collusion in FCC Spectrum Auctions, INFORMATION ECONOMICS AND POLICY, Vol. 21 (2009), pp. 90-100

P. Bajari and G. Summers, Detecting Collusion in Procurement Auctions, ANTITRUST LAW JOURNAL, Vol. 70 (2002), pp. 143-170

R. H. Porter and J. D. Zona, Ohio School Milk Markets: An Analysis of Bidding, RAND JOURNAL OF ECONOMICS, Vol. 30, No. 2 (Summer 1999), pp. 263-288

R. M. Abrantes-Metz and P. Bajari, Screening for Conspiracies: Applications for Litigation, Pre-Litigation, Regulation and Internal Monitoring, Working Paper (2009)

R. M. Abrantes-Metz and L. M. Froeb, Competition Authorities are Screening for Conspiracies: What are they Likely to Find?, The American Bar Association Section of Antitrust Law Economics Committee Newsletter, Vol. 8, No. 1 (Spring 2008)

R. M. Abrantes-Metz, L. M. Froeb, J. F. Geweke and C. T. Taylor, A Variance Screen for Collusion, INTERNATIONAL JOURNAL OF INDUSTRIAL ORGANIZATION, Vol. 24 (2006), pp. 467-486