Princeton Economics Group, Inc.

PEG economists Andrew Abere, John Bigelow and Peter Bronsteen have published an article on class certification in the Fall 2009 newsletter of the Economics Committee of the ABA Antitrust Section. In this article, the authors explain how the principles economists rely on to define relevant markets can be used to determine whether impact from an alleged antitrust violation may be demonstrated using common evidence. Using an alleged price-fixing cartel as an example, the authors consider when and under what conditions evidence that the alleged cartel increased price to one or more proposed class members would be sufficient to conclude that the cartel increased price to all other proposed class members.

The authors conclude that impact may be proven using common evidence when prospective class members purchase one or more products that are included in the same relevant product market as demand substitutes. The authors also conclude that the principles of substitution do not support the conclusion that impact may be proven using common evidence when the prospective class includes customers who purchase products that are not included in the same relevant market. This inquiry is familiar to antitrust economists and lawyers who commonly use the principles of market definition in assessing liability aspects of antitrust cases.

Click here to download "The Fundamental Economics of Class Certification" by Andrew Abere, John Bigelow and Peter Bronsteen.