Antitrust policy and price collusion: public agencies versus delegation ?

Gianmaria Martini and Cinzia Rovesti
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Cinzia Rovesti: Center for Operations Research and Econometrics (CORE), Université catholique de Louvain (UCL), Louvain la Neuve, Belgium and Antitrust Authority, Italy

No 1997036, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: In a simple economic setting with asymmetric information we compare different social insti- tutions which fight against industry cartels on prices. Firstly, we analyse the case where an Antitrust Authority is created and we distinguish two situations depending whether the agency has the possibility to commit itself to a policy or not. Secondly, we develop an alternative frame- work in which consumers can act legally against price collusion practices. Then, we compare the results in terms of social welfare associated to the three schemes. Even if a general result in favour to a ”delegated” antitrust action to consumers cannot be established, we show that in many instances private suits can be more effective than interventions of an Antitrust Authority.

Date: 1997-05-01
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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:1997036

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