Are cartel fines optimal? Theory and evidence from the European Union

Allain, Marie-Laure, Boyer, Marcel, Kotchoni, Rachidi and Ponssard, Jean-Pierre (2015) Are cartel fines optimal? Theory and evidence from the European Union. International Review of Law and Economics, 42. pp. 38-47.

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Official URL: http://tse-fr.eu/pub/31921

Abstract

Deterring the formation or continuation of cartels is a major objective of antitrust policy. We develop a dynamic framework to characterize the compensation and deterrence properties of fines, based on the fact that cartel stability depends on the ability to prevent deviation, which itself depends in part on fines imposed in case of detection and conviction. We show that the proper consideration of cartel dynamics plays a major role in determining optimal deterrent fines. Our results suggest that fines imposed by the European Commission in recent years meet the deterrence objective in a significant number of cases.

Item Type: Article
Language: English
Date: June 2015
Refereed: Yes
JEL codes: L13 - Oligopoly and Other Imperfect Markets
L41 - Monopolization; Horizontal Anticompetitive Practices
L42 - Vertical Restraints; Resale Price Maintenance; Quantity Discounts
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 03 May 2018 14:24
Last Modified: 24 Jan 2019 00:15
OAI ID: oai:tse-fr.eu:31921
URI: http://publications.ut-capitole.fr/id/eprint/25645

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