The Difference-in-Differences Approach in the Estimation of Cartel Damage

By Frank P. Maier-Rigaud & Slobodan Sudaric

A crucial step in the quantification of damage in the context of damages claims is the estimation of the counterfactual price level: the price level that would have been observed in the absence of the cartel. This article discusses the Difference-in-Differences (“DiD”) estimation procedure for the estimation of counterfactual prices. While DiD is a very powerful estimation method, it is demanding in terms of conditions that need to be satisfie