Jellal, Mohamed and Souam, Said (2012): A theory of antitrust enforcement game.
Download (413kB) | Preview
We analyze a situation where an antitrust authority delegates to an audit inspector the mission of gathering the sufficient information to condemn a cartel. The authority has two instruments at her disposal: rewarding the inspector with a proportion of the collected fine or providing him with information which enhances the probability of the success of the prosecution. More precisely, we explore the efficiency consequences of a contest between the audit inspector and the cartel. Both of them bid to win the contest by expending efforts. We show that the race issue depends positively on the financial incentives proposed to the inspector but the impact of an increase of the level of the fine, to be paid once an illegal agreement is detected, is ambiguous. Moreover, we show that the optimal combination of the two instruments consists in two regimes. When the marginal cost of providing the relevant information is relatively high, the antitrust authority equally shares the collected fine and does not provide the inspector with any information. Conversely, when this marginal cost is relatively small, the authority uses the two instruments. She has to provide him with the maximum level of information consistent with winning the contest with certainty
|Item Type:||MPRA Paper|
|Original Title:||A theory of antitrust enforcement game|
|Keywords:||Antitrust Enforcement, Collusion, Moral Hazard, Contest|
|Subjects:||K - Law and Economics > K4 - Legal Procedure, the Legal System, and Illegal Behavior > K42 - Illegal Behavior and the Enforcement of Law
K - Law and Economics > K2 - Regulation and Business Law > K21 - Antitrust Law
L - Industrial Organization > L4 - Antitrust Issues and Policies
|Depositing User:||Mohamed Jellal|
|Date Deposited:||25. Apr 2012 00:03|
|Last Modified:||27. Aug 2015 15:20|
 Baron, D. and D. Besanko (1984) : ”Regulation, Asymmetric Information and Auditing,” Rand Journal of Economics, Vol. 15, 447-70.
 Besanko, D. and D. Spulber (1989): ”Antitrust Enforcement under Asymmetric Information,” Economic Journal, Vol. 99, 408-25.
 Becker, G. and G. Stigler (1974) : ”Law Enforcement, Malfeasance and Compensation of effort,” Journal of Legal Studies, Vol. 3, 1-18.
 Dixit, A. (1987) : ”Strategic Behavior in Contests,” American Economic Review, Vol. 77,891-98.
 Heyes, A. (1997) : ”Environment Regulation by Private Contest,” Journal of Public Economics, Vol. 63, 407-28.
 Hirschleifer, J.(1988) : ”The Analytics of Continuing Conflict,” Synthese Vol. 76, 201-33.
 Malik, A. (1990) : ”Avoidance, screening and optimumenforcement,” Rand Journal of Economics, Vol. 21, 341-53.
 Milgrom, P. and J. Roberts (1988) : ”An Economic Approach to In‡uence Activities in Organization,” American Journal of Sociology, Vol. 94 Supplement, 154-79.
 Mookherjee, D. and I. Png (1995) : ”Corruptible Law Enforcers: How Should they be Compensated?,” Economic Journal, Vol. 105, 145-59.
 Pénard, T. and S. Souam (2002) : ”Politique de la concurrence et collusion en information asymétrique,” Annales d’Economie et de Statistique, N° 66; 209-33
 Reinganum, J. and L. Wilde (1985) : ”The Economics of Income Taxation: Compliance in a Principal-Agent Framework,” Journal of Public Economics, Vol. 26,1-18.
 Souam, S. (2001):”Optimal antitrust policy under different regimes of fines,” International Journal of Industrial Organization, Vol. 19, N°1-2; 1-26.