Antitrust policy and price collusion: public agencies vs delegation

Gianmaria Martini and Cinzia Rovesti
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Cinzia Rovesti: Autorità Garante della Concorrenza e del Mercato, Roma

No 2004021, Discussion Papers (REL - Recherches Economiques de Louvain) from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)

Abstract: This paper investigates the effectiveness of antitrust policy in fighting horizontal collusion under different regimes of policy implementation. We consider two regimes : a public agency regime, where an antitrust authority is in charge of competition policy, and a "delegation" regime, where the policy is chosen by consumers. In both regimes the policy is implemented under discretion. The analysis shows that delegation dominates, both in case of complete and imperfect information about production costs, the public agency regime because consumers credibly start off an higher level of investigation activity than the public agency. This resuit implies that the public agency will fight the cases involving "relevant" anti-competitive activities, while consumers will act also against "minor" violations. The combination of the two regimes yields an higher welfare than having only a public agency in charge of competition policy, because consumers can partially relax the agency's limited resources constraint.

Keywords: Antitrust policy; Horizontal collusion; Delegation; Policy regimes (search for similar items in EconPapers)
JEL-codes: L41 L51 (search for similar items in EconPapers)
Pages: 16
Date: 2004-06-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Journal Article: Antitrust policy and price collusion. Public agencies vs delegation (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:ctl:louvre:2004021

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