Browsing by Author "Bredenkamp, Annette Corlie"

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    The econometrics of dating anti-competitive effects with application to excessive pricing
    (Stellenbosch : Stellenbosch University, 2021-03) Bredenkamp, Annette Corlie; Boshoff, Willem H.; Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Economics.
    ENGLISH SUMMARY : Anti-competitive behaviour in a market is associated with related effects that may not always be captured in traditional approaches to locating damages. Conventionally, to determine when anti-competitive behaviour have started, prevailed, and ended, analysts rely on the formal documentary evidence presented in the case. However, the associated effects may have lasted before and/or after the formally established liability date. Such effects are central to proper damage estimation and may even have an impact on establishing the existence of conduct in the first place. With the focus on excessive pricing, this study firstly analyses the various benchmarks used locally and abroad to determine excessive pricing and finds that such benchmarking is done non-econometrically despite the need to properly control for demand and supply factors. This study then applies what is known from collusion literature to the dating of excessive pricing. Collusion literature shows that there is a problem with pre- and post-effects, and it is often necessary to differentiate between formal and effective dates. Furthermore, this study examines current policy approaches to determining anti-competitive dates and finds that precise dating is less important in pre-Covid-19 cases. However, there is a problem with dating Covid-19 excessive pricing cases because of the relevant regulations specifying the fixed 3-month comparative period. Econometric methods are particularly important in this regard and will be for excessive pricing cases to come. This study supplemented the traditional counterfactual methodology with a structural break test and a Markov switching-regime test to properly determine the effective dates of the case at hand. The application is to the Foskor excessive pricing case. This quantitative approach shows that, although the actual effect may precede or follow after the formal identified dates, wrongly specifying the relevant periods leads to a significant underestimation of the damages in the case at hand.