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Self‐reporting and Market Structure

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  • Matthew D. Rablen
  • Andrew Samuel

Abstract

Many regulators utilize self‐reporting, that is, wrongdoers reporting their own crimes to the authority, to enforce regulations in a variety of market contexts. This paper studies the effectiveness of self‐reporting within the context of an oligopoly. We identify two important consequences of implementing self‐reporting (relative to no‐reporting) for a welfare‐maximizing regulator. First, if the regulator can control only the audit probability and fine, then whether compliance rises or falls upon implementing self‐reporting depends on the level of competition. Second, if the regulator can also control the market size, then the welfare‐maximizing policy entails self‐reporting but with more competition and lower compliance than under no‐reporting.

Suggested Citation

  • Matthew D. Rablen & Andrew Samuel, 2021. "Self‐reporting and Market Structure," Economica, London School of Economics and Political Science, vol. 88(351), pages 782-808, July.
    • Handle: RePEc:bla:econom:v:88:y:2021:i:351:p:782-808
    DOI: 10.1111/ecca.12365
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    References listed on IDEAS

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