Antitrust Fines in Times of Crisis

Massimo Motta () and Natalia Fabra

No 9290, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: In a model in which firms can go bankrupt because of adverse market shocks or antitrust fines, we find that even large corporate fines may not be able to induce deterrence. Managerial penalties are thus needed. If the policy may be changed according to the state of the business cycle, then the optimal outcome can always be achieved through antitrust fines that are more severe in good times and more lenient in bad times. A time-independent policy may result in either too many bankruptcies or under-deterrence as compared to the optimal policy.

Keywords: Antitrust fines; Managing incentives; Business cycles (search for similar items in EconPapers)
JEL-codes: K14 K42 L13 (search for similar items in EconPapers)
Date: 2013-01
New Economics Papers: this item is included in nep-com, nep-law and nep-mic
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Citations: View citations in EconPapers (4)

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