The Determination of Optimal Fines in Cartel Cases The Myth of Underdeterrence

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

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Abstract: The determination of optimal fines to deter the formation or continuation of cartels is a major objective of competition policy. We provide an analysis of static and dynamic frameworks to characterize the restitution and deterrence properties of fines: cartel stability depends on their ability to prevent deviation by firms, while the benefit of a deviation depends on the fines to be imposed in case of detection by the antitrust authority. We show that the proper consideration of the dynamics of competition has a major impact on the determination of optimal dissuasive fines: our results suggest that a clear majority of fines imposed by the European Commission in recent years meet the deterrence objective.

Keywords: Optimal fines; Cartels (search for similar items in EconPapers)
Date: 2011-10-12
Note: View the original document on HAL open archive server: https://hal.science/hal-00631432
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Citations: View citations in EconPapers (25)

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Working Paper: The Determination of Optimal Fines in Cartel Cases - The Myth of Underdeterrence (2011)
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