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Special Section on Competition Policy Analysis • Rev. econ. contemp. 26 • 2022 • https://doi.org/10.1590/198055272620   copy

WHICH CHARACTERISTICS OF PRICE-FIXING AGREEMENTS ARE RELATED TO A GREATER DAMAGE TO CONSUMERS?* * *Paper originally submitted to the II Rio International Workshop on Advances in Competition Policy Analysis, that took place on December 5-6, 2019, at the Institute of Economics, Federal University of Rio de Janeiro (IE-UFRJ), Rio de Janeiro, Brazil.

QUAIS CARACTERÍSTICAS DOS ACORDOS DE FIXAÇÃO DE PREÇOS ESTÃO RELACIONADAS A UM MAIOR DANO AOS CONSUMIDORES?

Authorship SCIMAGO INSTITUTIONS RANKINGS

ABSTRACT

Despite the deterrence effect generated by antitrust laws, the fact is that many collusive agreements end up forming in the economy. An essential task is to understand how distinct market characteristics affect cartel profits and damages. This paper develops a theoretical model to assess which characteristics of price-fixing agreements are related to greater damage to consumers. Results indicate the following characteristics as responsible for greater damage: higher product similarity (substitutability); lower elasticity of demand (in absolute values); greater number of members; higher demand potential; and a higher velocity of transactions. Price-fixing agreements that have these characteristics more intensely, in comparison to others, tend to be more harmful to consumers, and, therefore, should be prioritized by antitrust authorities regarding detection, prosecution, and punishment.

KEYWORDS:
price-fixing agreements; cartel damage; antitrust; cartels; antitrust authority

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