Journal of Industry, Competition and Trade

, Volume 16, Issue 1, pp 81–100 | Cite as

Cartelization, Cartel Breakdown, and Price Behavior: Evidence from the German Cement Industry

  • Kai Hüschelrath
  • Tobias Veith


We use a unique dataset of about 340,000 market transactions from 36 smaller and larger customers of German cement producers to study the price behavior before and after the breakdown of a German cement cartel. We find that, first, while the cartel agreement was active, cartel members set higher list prices than non-cartel members; however, larger rebates granted by the cartel members led to similar transaction prices. Second, after the cartel breakdown, both cartel- and non-cartel members reduced transaction prices to a far larger extent than list prices. We build on these results and discuss implications for competition policy.


Competition policy Price behavior Cartels Cement List prices Rebates 

JEL Classification

L12 L21 L41 L61 K21 


  1. Allen J, Clark R, Houde J-F (2014) Price dispersion in mortgage markets. J Ind Econ 62(3):377–416CrossRefGoogle Scholar
  2. Asker J (2010) A study of the internal organization of a bidding cartel. Am Econ Rev 100:724–762CrossRefGoogle Scholar
  3. Beckert W, Smith H, Takahashi Y (2015) Competitive price discrimination in a spatially differentiated intermediate goods market. University of London, London, Working PaperGoogle Scholar
  4. Blair R, Maurer V (1982) Umbrella pricing and antitrust standing: an economic analysis. Utah Law Rev 763-796Google Scholar
  5. Blair R, Piette Durrance C (2009) Umbrella pricing: antitrust injury and standing, in D. Collins (ed.), issues in competition law and policy. Am Bar Assoc 2349-2368Google Scholar
  6. Bos I, Harrington J (2010) Endogenous cartel formation with heterogeneous firms. RAND J Econ 41:92–117CrossRefGoogle Scholar
  7. Busse, M., J. Silva-Risso and F. Zettelmeyer (2006), $1,000 Cash back: the pass-through of auto manufacturer promotions, Am Econ Rev 96(4): 1253–1270.Google Scholar
  8. Chicu, M. (2013), Dynamic Investment and Deterrence in the U.S. Cement Industry, Working Paper, Northwestern University, Evanston.Google Scholar
  9. Connor J, Lande R (2006) The size of cartel overcharges. Antitrust Bulle 51:983–1022Google Scholar
  10. Crawford G, Yurukoglu A (2012) The welfare effects of bundling in multichannel television markets. Am Econ Rev 102(2):643–685CrossRefGoogle Scholar
  11. Ellison G (1994) Theories of cartel stability and the joint executive committee. RAND J Econ 25:37–57CrossRefGoogle Scholar
  12. Ellison S, Snyder C (2010) Countervailing power in wholesale pharmaceuticals. J Ind Econ 58(1):32–53CrossRefGoogle Scholar
  13. European Commission (1994), Commission Imposes Fines on a Cement Producers’ Cartel, Press release on 30 November 1994, available at = IP/94/1108&format = HTML&aged = 1&language = EN&guiLanguage = en (last accessed on 16 August 2015).
  14. Friederiszick H, Röller L-H (2010) Quantification of harm in damages actions for antitrust infringements: insights from German cartel cases. J Compet Law Econ 6:595–618CrossRefGoogle Scholar
  15. Genesove D, Mullin W (2001) Rules, communication, and collusion: narrative evidence from the sugar institute case. Am Econ Rev 91:379–398CrossRefGoogle Scholar
  16. Goldberg P (1996) Dealer price discrimination in new car purchases: evidence from the consumer expenditure survey. J Polit Econ 104(3):622–654CrossRefGoogle Scholar
  17. Gowrisankaran G, Nevo A, Town R (2015) Mergers when prices are negotiated: evidence from the hospital industry. Am Econ Rev 105(1):172–203CrossRefGoogle Scholar
  18. Green E, Porter R (1984) Noncooperative collusion under imperfect price information. Econometrica 52:87–100CrossRefGoogle Scholar
  19. Grennan M (2013) Price discrimination and bargaining: empirical evidence from medical devices. Am Econ Rev 103(1):145–177CrossRefGoogle Scholar
  20. Harrington J (2004) Post-cartel pricing during litigation. J Ind Econ 52:517–533CrossRefGoogle Scholar
  21. Harrington J, Skrzypacz A (2007) Collusion under monitoring of sales. RAND J Econ 38:314–331CrossRefGoogle Scholar
  22. Harrington, J., K. Hüschelrath, U. Laitenberger and F. Smuda (2015), The Discontent Cartel Member and Cartel Collapse: The Case of the German Cement Cartel. Int J Ind Organ 42:106–119Google Scholar
  23. Higher Regional Court (2009), Decision of the Higher Regional Court, Düsseldorf, VI-2a Kart 2–6/08 OWi, 26 June 2009Google Scholar
  24. Hopkins, E. (2008), Price Dispersion, in: Durlauf, S. and L. Blume (Eds.), The New Palgrave Dictionary of Economics, Second Edition, Palgrave Macmillan, available at (last accessed on 16 August 2015).
  25. Houde J-F (2012) Spatial differentiation and vertical mergers in retail markets for gasoline. Am Econ Rev 102(5):2147–2182CrossRefGoogle Scholar
  26. Hüschelrath K, Veith T (2014) Cartel detection in procurement markets. Manag Decis Econ 35(6):404–422CrossRefGoogle Scholar
  27. Hüschelrath, K., N. Leheyda, K. Müller, T. Veith (2012), Schadensermittlung und Schadensersatz bei Hardcore-Kartellen: Ökonomische Methoden und rechtlicher Rahmen, Baden-BadenGoogle Scholar
  28. Jevons W (1888) The theory of political economy, Third edn. Macmillan, LondonGoogle Scholar
  29. Kaplow L (2011) An economic approach to price fixing. Antitrust Law J 77:343–449Google Scholar
  30. Langer A (2012) Demographic preferences and price discrimination in new vehicle sales. University of Michigan, Ann Arbor, Working PaperGoogle Scholar
  31. Levenstein M, Suslow V (2006) What determines cartel success? J Econ Lit 44:43–95CrossRefGoogle Scholar
  32. Miller N, Osborne M (2014) Spatial differentiation and price discrimination in the cement industry: evidence from a structural model. RAND J Econ 45(2):221–247CrossRefGoogle Scholar
  33. Moulton B (1986) Random group effects and the precision of regression estimates. J Econ 32:385–397CrossRefGoogle Scholar
  34. Porter R (1983) A study of cartel stability: the joint executive committee, 1880–1886. Bell J Econ 14:301–314CrossRefGoogle Scholar
  35. Porter R, Zona J (1999) Ohio school markets: an analysis of bidding. RAND J Econ 30:263–288CrossRefGoogle Scholar
  36. Röller L-H, Steen F (2006) On the workings of a cartel: evidence from the Norwegian cement industries. Am Econ Rev 96:321–338CrossRefGoogle Scholar
  37. Scott Morton F (1997) Entry and predation: British shipping cartels 1879–1929. J Econ Manag Strateg 6:679–724CrossRefGoogle Scholar
  38. Scott Morton F, Zettelmeyer F, Silva-Risso J (2011) What matters in a price negotiation: evidence from the US auto retailing industry. Quant Mark Econ 9:365–402CrossRefGoogle Scholar
  39. Scott Morton, F. F. Zettelmeyer and J. Silva-Risso (2003), Consumer information and discrimination: does the internet affect the pricing of new cars to woman and minorities?, Quant Mark Econ 1(1), 65–92Google Scholar
  40. Selten R (1973) A simple model of imperfect competition where four are few and six are many. Int J Game Theory 2:141–201CrossRefGoogle Scholar
  41. Sorensen A (2003) Insurer-hospital bargaining: negotiated discounts in post-deregulation Connecticut. J Ind Econ 51(4):471–492CrossRefGoogle Scholar
  42. Woodward S, Hall R (2012) Diagnosing consumer confusion and Sub-optimal shopping effort: theory and mortgage-market evidence. Am Econ Rev 102(7):3249–3276CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media New York 2015

Authors and Affiliations

  1. 1.Competition and Regulation Research Group, ZEW Centre for European Economic ResearchMannheimGermany
  2. 2.University of MannheimMannheimGermany
  3. 3.University of Applied SciencesRottenburgGermany

Personalised recommendations