How Much Do Cartels Overcharge?

The estimation of cartel overcharges lies at the heart of antitrust policy on cartel prosecution as it constitutes a key element in the determination of fines. Connor and Lande (2008) conducted a survey of cartels and found a mean overcharge estimate in the range of 31% to 49%. By examining more sources, Connor (2010) finds a mean of 50.4% for successful cartels. However, the data used in those studies are estimates obtained from different methodologies, sources and contexts rather than from direct observations. Therefore, these data are subject to model error, estimation error, endogeneity bias, and publication bias. An examination of the Connor database reveals that the universe of overcharge estimate is asymmetric, heterogenous and contains a number of influential observations. Beside the fact that overcharge estimates are potentially biased, fitting a linear regression model to the data without providing a carefull treatment of the problems raised above may produce distorted results. We conduct a meta-analysis of cartel overcharge estimates in the spirit of Connor and Bolotova (2006) while providing a sound treatment of these matters. We find bias-corrected mean and median overcharge estimates of 15.47% and 16.01%. Clearly, our results have significant antitrust policy implications

The Econometrics of Cartel Overcharges

Connor and Lande (2006) conducted a survey of cartel overcharge estimates and found an average in the range of 31% to 49%. By examining more sources, Connor (2010b) finds a median of 23.3% for all type of cartels and a mean of 50.4% for successful cartels. However, the data used in these studies are estimates rather than true observations, since the true illegal profits of cartels are rarely observable. Therefore, these data are subject to model error, estimation error and publication bias. A quick glance at the Connor database reveals that the universe of overcharge estimates is asymmetric, heterogenous and contains a number of influential observations. Beside the fact that overcharge estimates are potentially biased, fitting a linear OLS model to the data without providing a careful treatment of the problems raised by the publication bias, outliers, asymmetry, and heterogeneity will necessarily produce distorted results. We conduct a meta-analysis of cartel overcharge estimates in the spirit of Connor and Bolotova (2006), but providing a sound treatment of the matters raised above. We find for cartels with initial overcharge estimates lying between 0% and 50%.a bias-corrected mean overcharge estimate of 13.6% with a median of 13.6% and for all cartels of all types a bias-corrected mean of 17.5% with a median of 14.1%

The Econometrics of Cartel Overcharges

Connor and Lande (2006) conducted a survey of cartel overcharge estimates and found an average in the range of 31% to 49%. By examining more sources, Connor (2010b) finds a median of 23.3% for all type of cartels and a mean of 50.4% for successful cartels. However, the data used in these studies are estimates rather than true observations, since the true illegal profits of cartels are rarely observable. Therefore, these data are subject to model error, estimation error and publication bias. A quick glance at the Connor database reveals that the universe of overcharge estimates is asymmetric, heterogenous and contains a number of influential observations. Beside the fact that overcharge estimates are potentially biased, fitting a linear OLS model to the data without providing a carefull treatment of the problems raised by the publication bias, outliers, asymmetry, and heterogeneity will necessarily produce distorted results. We conduct a meta-analysis of cartel overcharge estimates in the spirit of Connor and Bolotova (2006), but providing a sound treatment of the matters raised above. We find a mean bias-corrected overcharge estimate of 13.8% for all cartels, and of 13.6% for cartels with initial estimates lying between 0% and 50%. Connor et Lande (2006) survolent la littérature sur les majorations de prix imposées par les cartels et concluent à une augmentation moyenne variant entre 31 % et 49 %. Considérant un échantillon plus grand, Connor (2010b) trouve une médiane de 23,3 % pour tous les types de cartel et une moyenne de 50,4 % pour les cartels dont les majorations de prix estimées sont positives. Cependant, les échantillons utilisés dans ces études sont constitués d’estimations et non pas d’observations directes. De ce fait, ces échantillons héritent possiblement d’erreurs de modélisation et d’estimation, ainsi que d’un biais de publication. Une analyse sommaire des majorations dans l’échantillon de Connor révèle une distribution asymétrique, de l’hétérogénéité et la présence d’observations aberrantes. Ainsi, au-delà du fait que les estimations d’augmentation de prix par les cartels sont potentiellement biaisées, l’estimation d’un modèle par MCO avec de telles données sans un traitement adéquat de l’asymétrie, de l’hétérogénéité et des données aberrantes produirait des résultats déformés. Nous réalisons une nouvelle méta-analyse dans le même esprit que celui de Connor et Bolotova (2006), mais en proposant une prise en compte adéquate des problèmes mentionnés ci-dessus. Après correction du biais d’estimation, nos résultats suggèrent que la moyenne des majorations de prix estimées est de l’ordre de 13,8 % pour tous les types de cartels et de 13,6 % pour les cartels dont les estimations de majoration de prix se situaient initialement entre 0 % et 50 %.Cartels, overcharges, Cartels, majoration de prix.

Challenges and pitfalls in cartel fining

We analyze significant challenges and pitfalls faced by antitrust authorities in the implementation of competition policies particularly against naked cartels and propose measures principled in economic theory to circumvent these issues. We review leniency programs in different jurisdictions, the private versus public control of cartels, as well as the determination of cartel fines and other punishment instruments. Regarding cartel fines, we first discuss the sometimes-conflicting objectives of restitution and deterrence, then the economic-based versus legal- and proportional-based punishment. Moreover, we assess the proper modeling of cartel dynamics including the probability of detection and conviction, the relevant cartel duration, and the estimation of but-for prices and cartel overcharges

Bacillus pumilus BpCRI 6, a promising candidate for cellulase production under conditions of catabolite repression

Cellulose degrading organisms have been used for the conversion of cellulolytic materials into soluble sugars or solvents in several biotechnological and industrial applications. In this report, a mutant of Bacillus pumilus was obtained after chemical mutagenesis and screened for cellulase production. This mutant named BpCRI 6 was selected for its ability to produce cellulase under catabolite repression. Cellulase yield by BpCRI 6 was four times higher than that of the wild type under optimum growth conditions (pH 6.5, 25°C and Ca2+ 1mM). In shaking flask cultures, production of cellulase  by the wild type was completely repressed in the presence of 25 mM glucose, while BpCRI 6 strain still exhibited a residual cellulase production of 80 and 40% at 25 mM and 40 mM of glucose concentrations respectively. The mutant strain is stable and grows rapidly in liquid and solid media. Under conditions of catabolite repression (40 mM of glucose), the production of cellulase by this mutant is particularly significant when compared to Trichoderma reesei a well-known cellulase producer, which is under control of end-product inhibition. This is the first report of a successful catabolite repression insensitivity of cellulase production by a mutant of B. pumilus. (African Journal of Biotechnology: 2003 2(6): 140-146

Diversity of yeasts involved in the fermentation of tchoukoutou, an opaque sorghum beer from Benin

Opaque sorghum beers are traditional alcoholic beverages in several African countries. Known as tchoukoutou in Benin, the beer is often obtained from an uncontrolled fermentation. It is consumed in an actively fermenting state and has a sour taste. The present study characterized and identified the yeasts involved in the fermentation process of this type of beer using the phenotypical approach. Of 12 beers from 4 different locations, the mean values of the pH, titratable acidity, dry matter content and refractive index were respectively 3.67, 0.70 (% as lactic acid) 18.08% and 7.00. Lactic acid bacteria and yeasts were the predominant microorganisms involved in the fermentation of tchoukoutou. Their counts were respectively 9.1 log cfu/ml and 9.1 logcfu/g. Enterobacteriaceae were not detectable in the beer. Based on the phenotypic characters and the assimilation profiles of 40 isolated yeasts, four genera with seven species of yeasts were identified. The yeast species predominant in the Benin opaque sorghum beer tchoukoutou was Saccharomyces cerevisa

Challenges and pitfalls in cartel policy and fining

We analyze significant challenges and pitfalls faced by antitrust authorities in the implementation of competition policies particularly against naked cartels and propose measures principled in economic theory to circumvent these issues. We review leniency programs in different jurisdictions, the private versus public control of cartels, as well as the determination of cartel fines and other punishment instruments. Regarding cartel fines, we first discuss the sometimes-conflicting objectives of restitution and deterrence, then the economic-based versus legal- and proportional-based punishment. Moreover, we assess the proper modeling of cartel dynamics including the probability of detection and conviction, the relevant cartel duration, and the estimation of but-for prices and cartel overcharges

Challenges and pitfalls in cartel policy and fining

We analyze significant challenges and pitfalls faced by antitrust authorities in the implementation of competition policies particularly against naked cartels and propose measures principled in economic theory to circumvent these issues. We review leniency programs in different jurisdictions, the private versus public control of cartels, as well as the determination of cartel fines and other punishment instruments. Regarding cartel fines, we first discuss the sometimes-conflicting objectives of restitution and deterrence, then the economic-based versus legal- and proportional-based punishment. Moreover, we assess the proper modeling of cartel dynamics including the probability of detection and conviction, the relevant cartel duration, and the estimation of but-for prices and cartel overcharges

Optimisation du procédé traditionnel de maltage du sorgho pour la production de boissons fermentées

La présente étude a évalué les conditions d’optimisation des procédés traditionnels de maltage du sorgho au Bénin. L’objectif est d’améliorer, à l’échelle semi-industrielle, la production et la qualité du malt de sorgho. L’étude s’est déroulée en deux phases. La première phase a consisté en une enquête technologique au cours de laquelle la technologie traditionnelle de production de malt a été suivie et des échantillons de malt collectés. Dans la deuxième phase, la technologie traditionnelle a été reproduite en conditions contrôlées au laboratoire en faisant varier les différents paramètres de maltage que sont la durée de trempage et la durée de germination. Les résultats ont montré qu’il existe une grande variabilité au niveau des caractéristiques physicochimiques des malts collectés auprès des productrices de boissons maltées. L’analyse de variance a révélé que la durée de trempage et la durée de germination ont un effet significatif sur l’extrait sec, le pH, le pouvoir diastasique et le rapport α/β-amylasique des malts dérivés. Une analyse en composantes principales a été effectuée sur les caractéristiques des malts produits en conditions contrôlées et les conditions optimales de production de malt de qualité adéquate ont été établies.Keywords: Sorgho, malt, pouvoir diastasique, germination, fermentation, optimisatio

The molecular initiation and subsequent acquisition of disease resistance in plants

Interactions between disease resistance (R) genes in plants and their corresponding pathogen avirulence (Avr) genes are the key determinants of whether a plant is susceptible or resistance to a pathogen attack. Evidence has emerged that these gene-for-gene interactions in the perception of pathogenic invasions and development of acquired resistance in plants involve different molecular and hormonal transduction pathways, which are still poorly understood. It has become apparent that plants actively produce several phytohormones such as ethylene, jasmonate, salicylic acid, and reactive oxygen intermediates prior to upregulation of R genes. The physiological role of these molecules in plant resistance to pathogens is beginning to attract attention. The use of transgenic plants in recent attempts, including development of mutants with altered R genes, has provided new insights into the mechanisms involved in pathogen perception, signal transduction and subsequent resistance to disease in plants. This review tries to summarize current knowledge of pathogen-related genes in plants, and how they can be use to improve disease resistance in agronomically valuable plants. It also describes the molecular basis of defense mechanisms in plants under pathogen attack. (African Journal of Biotechnology: 2003 2(2): 26-32