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Dr. Pascal Hildebrand successfully defends second doctorate on truck cartel damages

On 2 April 2024, EE&MC’s Pascal Hildebrand successfully defended his second PhD at Maastricht University’s School of Business and Economics, with the thesis "Analysing a collusion of truck manufacturers: A qualitative and quantitative multilevel approach”.

The goal of Dr. Hildebrand’s research was to assess whether and to what extent the truck cartel, which was uncovered by the European Commission in 2016, may have led to negative market effects. Dr. Hildebrand’s conclusion, based on an analysis of the facts and empirical analysis of prices, is that the cartel did indeed have a negative impact on the market. Dr. Hildebrand also found that there is only a limited body of literature that has dealt with the question of the impact of list price collusion on negotiated transaction prices, so the dissertation is an important addition to this body of literature.

The study consists of four sections: a factual analysis of the cartel conduct and the truck market, a discussion of the plausibility of potential harmful market outcome, a customer survey to assess potential segmentation of the truck market, and an analysis of actual gross list prices and negotiated transaction prices based on a proprietary dataset.

In the first part of the thesis, Dr. Hildebrand classifies the collusion between truck manufacturers as an explicit ‘price coordination arrangement’, as found by the European Commission. He also notes that the cartel involved a range of other anticompetitive conduct, including an exchange of competitively sensitive information. The thesis shows that the truck makers first aligned their gross list prices and established a ‘collusive equilibrium’, in other words a stable cartel. They then continuously monitored and implemented the agreement.

Dr. Hildebrand in the second part of the thesis makes a qualitative assessment of whether the gross list price collusion as a cause can impact negotiated transaction prices as an effect. The thesis finds that when it comes to actual cartel conduct, there is a strong indication of substantial cartel discipline which allowed it to last successfully for a very long time. Based on a qualitative assessment of the market facts, the thesis concludes that the cartel and the characteristics of the truck market structure provide strong indication that a harmful market outcome is plausible.

In the third part of the thesis, Dr. Hildebrand focused on whether the market for trucks is characterized by segmentation, as this would have an impact on criteria for structuring data in the empirical analysis. This was done through a survey of truck buyers, using the method of conjoint analysis. Based on the survey results and by estimating the so-called utility values (how much benefit one derives from a purchase), the thesis finds that the average respondent (from the long-haul logistics sector and predominantly using tractor units) does not find other types of lorries are substitutable with the two other truck types.

The fourth part of the thesis is an empirical analysis on truck pricing effects of the cartel. Dr. Hildebrand first found that truck makers compete on price, which is driven by customer preferences and the end-user’s willingness to pay. Dr. Hildebrand then collected and analysed gross list prices for trucks in Germany from 1991 to 2017. Using a regression analysis, Dr. Hildebrand estimates that the final purchasers of heavy Daimler tractor units paid €15,000 too much net. This means that the cartel caused a price overcharge of more than 20% and that the truck cartel has indeed affected the market to the detriment of end customers.