The Distortive Effects of Antitrust Fines Based on Revenue

Yannis Katsoulacos, Giancarlo Spagnolo and Vasiliki Bageri

No 9518, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: In most jurisdictions, antitrust fines are based on affected commerce rather than on collusive profits, and in some others, caps on fines are introduced based on total firm sales rather than on affected commerce. We uncover a number of distortions that these policies generate, propose simple models to characterise their comparative static properties, and quantify them with simulations based on market data. We conclude by discussing the obvious need to depart from these distortive rules-of-thumb that appear to have the potential to substantially reduce social welfare.

Keywords: Antitrust; Deterrence; Fines; Law enforcement (search for similar items in EconPapers)
JEL-codes: K21 L40 (search for similar items in EconPapers)
Date: 2013-06
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Citations: View citations in EconPapers (18)

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Related works:
Journal Article: The Distortive Effects of Antitrust Fines Based on Revenue (2013)
Working Paper: The distortive effects of antitrust fines based on revenue (2013)
Working Paper: The Distortive Effects of Antitrust Fines Based on Revenue (2012)
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