Deadweight Loss and Collective Redress in Competition Law
Market power leads to two effect: a distributional and an allocative one. In other words, a cartel sells less units at higher prices. Therefore, a certain share of consumers that would have bought the product at the equilibrium price does not acquire the product. The deadweight loss emerges. Traditionally legal scholars are more concerned about redistribution than about the deadweight loss. For economists the major concern is the deadweight loss. Competition law enforcement if considerate of economic insights needs to ensure that the wrongdoers also face responsibility for causing the deadweight loss. This contribution will delve into the potential that collective redress has for this matter. It reports an inspiring case from Chile