Relative Responsibility for Cartel Damages.

CEG Associate Dr Dominik Welter has contributed together with Prof. Stefan Napel (University of Bayreuth) to the latest issue of the Journal of Institutional and Theoretical Economics.

The article discusses the allocation of cartel damages based on the EU’s relative responsibility norm between jointly and severally liable cartel members. Using tools from cooperative game-theory, it shows that even symmetric firms can bear unequal responsibility for harm and that market shares typically do not capture responsibility. The article argues that a case-by-case assessment is necessary to appropriately determine a firm's relative responsibility and thus – according to the Directive on Antitrust Damages Actions 2014/104/EU – its share of a customer's harm no matter whether parties litigate (and a group of firms was sued successfully) or settle. In both cases, the EU Directive refers to the cartel member’s relative responsibility for damages.