 CARTEL PUNISHMENT AND THE DISTORTIVE EFFECTS OF FINESEmilie Dargaud, Andrea Mantovani and Carlo Reggiani Journal of Competition Law and Economics, 2016, vol. 12, issue 2, 375-399 Abstract: The fight against cartels is a priority for antitrust authorities worldwide but the goal is pursued in many different ways. Several types of fines can be levied on firms that are caught colluding but one common trait is that fines are usually distortive. In this article we focus on the economic effects of distortive fines. To this end, we compare a fine based on the cartel profit as opposed to one based on the cartel damage. We study the effects of the two fines and show that a potential trade-off between ex ante deterrence and ex post consumer surplus may occur. We show that such a trade-off is of particular relevance when antitrust authorities face exogenous fine caps, as it is often the case in practice. The results are robust to a number of extensions, including the relevant case of fines designed to punish managerial firms involved in cartel activities. JEL-codes: K21 K42 L44 (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:oup:jcomle:v:12:y:2016:i:2:p:375-399. Access Statistics for this article Journal of Competition Law and Economics is currently edited by Nicholas Economides, Amelia Fletcher, Michal Gal, Damien Geradin, Ioannis Lianos and Tommaso Valletti More articles in Journal of Competition Law and Economics from Oxford University Press |
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