Concrete Shoes for Competition - The Effect of the German Cement Cartel on Market Price

Abstract

We use publicly available price data from the German cement industry to estimate the cartel-induced price increase. We apply two different comparator-based approaches – the ‘before-and-after’ approach and the ‘difference-in-differences’ approach – and especially study the impact of various assumptions on the transition period from the cartel period to the non-cartel period on the overcharge estimate. We find that the cement cartel led to price overcharges in a range from 20.3 to 26.5 percent depending on model approach and model assumptions.