Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/200674 
Year of Publication: 
2018
Series/Report no.: 
MAGKS Joint Discussion Paper Series in Economics No. 18-2018
Publisher: 
Philipps-University Marburg, School of Business and Economics, Marburg
Abstract: 
We present a pragmatic approach to calculating the total economic loss induced by a cartel, focusing on the European trucks cartel (1997-2011). Overall, we estimate a net welfare loss of approximately €0.7 bn. and an overcharge below 1% (€1.8 bn.). The cartel overcharge is surprisingly low. We explain this by (1) the existence of a reference market with an already elevated price level and (2) by other industry-specific factors that encourage cartel arrangements. In the case of the trucks cartel, the companies involved have apparently preferred the Hicksian "quiet life" of the monopolist to a further maximization of profits.
Subjects: 
Cartel
Welfare
Efficiency
Overcharge
Trucks
JEL: 
D43
D61
L62
Document Type: 
Working Paper

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