Are Cartel Fines Optimal? Theory and Evidence from the European Union

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

CIRANO Working Papers from CIRANO

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 a majority of fines imposed by the European Commission in recent years meet the deterrence objective. Dissuader la formation ou le maintien des cartels est un objectif important de la politique antitrust. Nous développons un cadre analytique dynamique pour caractériser le niveau de dissuasion des amendes et indemnisation, fondé sur le fait que la stabilité d'un cartel dépend de la capacité à prévenir les déviations, qui elle-même dépend en partie des amendes infligées en cas de détection et de conviction. Nous montrons que la prise en compte appropriée de la dynamique des cartels joue un rôle clé dans la détermination du niveau des amendes optimales. Nos résultats suggèrent que les amendes imposées par la Commission Européenne au cours des dernières années sont dissuasives, du moins en majorité

Keywords: Cartels; fines; antitrust policy; Cartels; amendes; politique antitrust; concurrence (search for similar items in EconPapers)
JEL-codes: L13 L41 L42 (search for similar items in EconPapers)
Date: 2013-07-01
New Economics Papers: this item is included in nep-com and nep-law
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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https://cirano.qc.ca/files/publications/2013s-24.pdf

Related works:
Journal Article: Are cartel fines optimal? Theory and evidence from the European Union (2015)
Working Paper: Are Cartel Fines Optimal? Theory and Evidence From the European Union (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:cir:cirwor:2013s-24

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