Screens for Conspiracies and Their Multiple Applications

A screen is a statistical test designed to detect conspiracies aimed at illegally manipulating a market. Competition authorities, academics, and consultants have designed a variety of screens to detect competition problems, and the use of such screens has been increasing.  In this paper, we first describe screens designed to detect bid-rigging, price-fixing, market- allocation schemes, and commodity-market manipulation.  Next, we discuss the ways in which screens can be used by plaintiffs and defendants in antitrust cases.  These include: (i) class certification, (ii) motions to dismiss after Twombly;  (iii) estimating the effects and damages of collusion; (iv) assisting companies in deciding when and whether to file a leniency application; (v) assisting in disproving the existence of a conspiracy and manipulation or establishing its immateriality; and (vi) assisting managers in large companies to monitor for data manipulation (e.g. falsified reimbursement or accounting statements) and price-fixing in purchasing.