Legal Principles in Antitrust Enforcement
Harold Houba,
Evgenia Motchenkova and
Quan Wen (wenq2@uw.edu)
Scandinavian Journal of Economics, 2018, vol. 120, issue 3, 859-893
Abstract:
We study antitrust enforcement that aims to channel price‐fixing incentives of cartels through setting fine schedules and detection levels. Fines obey legal principles, such as the punishment should fit the crime, proportionality, bankruptcy considerations, and minimum fines. Bankruptcy considerations limit maximum fines, ensure abnormal cartel profits, and impose a challenge for optimal antitrust enforcement. We derive the fine schedule and detection level that are constrained‐optimal under legal principles and sustainability of cartel prices. This fine schedule lies below the maximum fine, makes collusion on lower prices more attractive than on higher prices, and, hence, relates to the body of literature on marginal deterrence.
Date: 2018
References: Add references at CitEc
Citations: View citations in EconPapers (6)
Downloads: (external link)
https://doi.org/10.1111/sjoe.12234
Related works:
Working Paper: Legal Principles in Antitrust Enforcement (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:bla:scandj:v:120:y:2018:i:3:p:859-893
Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0347-0520
Access Statistics for this article
Scandinavian Journal of Economics is currently edited by Richard Friberg, Matti Liski and Kjetil Storesletten
More articles in Scandinavian Journal of Economics from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery (contentdelivery@wiley.com).