Are cartel fines optimal? Theory and evidence from the European Union

Marie-Laure Allain, Marcel Boyer, Rachidi Kotchoni and Jean-Pierre Ponssard

International Review of Law and Economics, 2015, vol. 42, issue C, 38-47

Abstract: Deterring the formation or continuation of cartels is a major objective of antitrust policy. We develop a dynamic framework to characterize the compensation and deterrence properties of fines, based on the fact that cartel stability depends on the ability to prevent deviation, which itself depends in part on fines imposed in case of detection and conviction. We show that the proper consideration of cartel dynamics plays a major role in determining optimal deterrent fines. Our results suggest that fines imposed by the European Commission in recent years meet the deterrence objective in a significant number of cases.

Keywords: Cartels; Fines; Antitrust policy (search for similar items in EconPapers)
JEL-codes: L13 L41 L42 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

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Related works:
Working Paper: Are Cartel Fines Optimal? Theory and Evidence From the European Union (2014)
Working Paper: Are Cartel Fines Optimal? Theory and Evidence from the European Union (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:irlaec:v:42:y:2015:i:c:p:38-47

DOI: 10.1016/j.irle.2014.12.004

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