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ClassActionsandPrivateAntitrustLitigation∗AlbertH.ChoiUniversityofVirginiaLawSchoolKathrynE.SpierHarvardLawSchoolFebruary4,2019AbstractThepaperanalyzestheeffectofprivateantitrustlitigationonfirms’abil-itytocolludeandchargesupracompetitivemarketprices.Whenthecostoflitigationisbelowathreshold,firmschargehighmarketprices,accommodatelawsuits,andacceptthelitigationcostsasjustanothercostofdoingbusi-ness.Bycontrast,whenthecostoflitigationisabovethethreshold,thefirmschargelowermarketpricesanddeterlitigation.Wemodeltheclassactionasamechanismthatallowsplaintiffstolowertheirlitigationcosts,andshowthatclassactionsmayormaynotbeprivatelyandsociallydesirable.Wealsoshowthatthefirms’privateincentivestoblockclassactionlawsuitsmaybeeitheralignedwiththesocialincentives,sociallyexcessive,orsociallyinsuffi-cient.Variousextensions,suchassettlement,contingentfeecompensation,feeshifting(loser-pays-allrule),anddamagemultipliers(trebledamages),arealsoexamined.JELCodes:D21,K12,K21,K41,L41∗WewouldliketothankAndyDaughety,L...