Antitrust Enforcement and Marginal Deterrence

Arbeitspapier

We study antitrust enforcement in which the fine must obey four legal principles: punishments should fit the crime, proportionality, bankruptcy considerations, and minimum fines. We integrate these legal principles into an infinitely-repeated oligopoly model. Bankruptcy considerations ensure abnormal cartel profits. We derive the optimal fine schedule that achieves maximal social welfare under these legal principles. This optimal fine schedule induces collusion on a lower price making it more attractive than on higher prices. Also, raising minimum fines reduces social welfare and should never be implemented. Our analysis and results relate to the marginal deterrence literature by Shavell (1992) and Wilde (1992).

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Tinbergen Institute Discussion Paper ; No. 11-166/1

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Antitrust Law ; Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection ; Stochastic and Dynamic Games; Evolutionary Games; Repeated Games
• Thema: Antitrust enforcement ; Antitrust Law ; Cartel ; Oligopoly ; Repeated game

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Houba, Harold ; Motchenkova, Evgenia ; Wen, Quan
• Ereignis: Veröffentlichung
• (wer): Tinbergen Institute
• (wo): Amsterdam and Rotterdam
• (wann): 2011

Weitere Informationen

• Handle: http://hdl.handle.net/10419/87155
• Letzte Aktualisierung: 10.03.2025, 11:45 MEZ