|
This article considers methodology of measurement economics by Timbergen and Keynes and derives a lesson from cartel damage in light of Korea¡¯s antitrust law. South Korea¡¯s Supreme Court cartel cases held that the plaintiff must quantify the amount of damages with econometric analysis based on the but-for-price test. Like many lawyers, many economists seem to agree with the court ruling. Most economists thought that the only problem with cartel damage was technical methods, not the methodology itself. In fact, modern economics does not seem to take the methodology seriously. However, the assumptions on which multiple regression relies are extremely restrictive and irrational, leaving the fundamental question of whether the but-for price can be known as multiple regression. This article concludes that none of the recipients can earn a price in econometrics. Quantifying cartel damage through multiple regression is not a sound science, but a kind of belief or myth.
|