Cartels - Case 5
Calculation of a but-for price in a cartel case. Major German cement producers are accused of distorting competition by conspiratorial price-fixing between 1997 and 2001. E.CA carried out an analysis with the objective of determining the likely price level in the German cement market for this time period under competitive conditions. We used the Cournot model of oligopolistic competition to determine the long-term equilibrium price, given a market characterised by a homogeneous good and quantity competition. The model used the actual market concentration of the German cement market, demand elasticity assumptions based on the relevant empirical literature, and cost assumptions of the Kreps und Scheinkman model (1983), adapted to operation under full capacity.