Multiple damages in private antitrust suits

by Jonathan Cave

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Stephen Salant's analysis of multiple damages for private antitrust suits ("Treble Damage Awards in Private Lawsuits for Price Fixing," Journal of Political Economy, December 1987) is generalized. The neutrality result that multiple damages do not affect production is shown to hold for a wide range of expected penalty and cost functions, provided indemnification is complete and consumers expect penalties to be a multiple of quantity purchased. If consumers receive less than the cartel pays, neutrality is much less likely.

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