The Competition Between Competition Rules

Hans-Werner Sinn

No 2214, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Open borders imply systems competition. This paper studies the implications of systems competition for the national competition rules. It is shown that an equilibrium where all countries retain their antitrust laws does not exist, since abolishing this law makes it possible for a single country to establish a cartel that successfully appropriates foreign business profits. Instead of such an equilibrium, a deregulation race is likely to emerge in which all but the last country repeal their antitrust laws. The deregulation race results in a chain of Stackelberg leadership positions taken over by national cartels that renders lower profits and higher consumer rents than would have been the case with harmonization of the antitrust laws.

Keywords: Deregulation; Oligopoly; Systems Competition (search for similar items in EconPapers)
JEL-codes: D43 H7 L43 (search for similar items in EconPapers)
Date: 1999-08
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Working Paper: The Competition between Competition Rules (1999)
Working Paper: The Competition Between Competition Rules (1999)
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