Rosa Abrantes-Metz, Patrick Bajari, Jun 19, 2012
A screen is a statistical test designed to detect conspiracies aimed at illegally manipulating a market. Competition authorities, academics, and consultants have designed a variety of screens to detect competition problems, and the use of such screens has been increasing. In this paper, we first describe screens designed to detect bid-rigging, price-fixing, market- allocation schemes, and commodity-market manipulation. Next, we discuss the ways in which screens can be used by plaintiffs and defendants in antitrust cases. These include: (i) class certification, (ii) motions to dismiss after Twombly; (iii) estimating the effects and damages of collusion; (iv) assisting companies in deciding when and whether to file a leniency application; (v) assisting in disproving the existence of a conspiracy and manipulation or establishing its immateriality; and (vi) assisting managers in large companies to monitor for data manipulation (e.g. falsified reimbursement or accounting statements) and price-fixing in purchasing.
Reprinted from the CPI Journal, Autumn 2010, Volume 6 Number 2
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