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Errors of I and II Types in Economic Exchanges with Third Party Enforcement

Author

Listed:
  • Shastitko, A.

    (Bureau of Economic Analysis Foundation (BEA), Moscow, Russia)

Abstract

Coordination and distribution effects in economic exchanges with third party enforcement due to errors of I and II types are at the center of the article. Based on idea of opportunity for equilibrium Pareto-improvement in one shot prisoners’ dilemma game by third-party enforcer it has been shown not only constraints on cost of enforcement services but consequences of errors of I and II types both non-discriminatory and discriminatory cases. Discrimination by third party is analyzed not only from the players direct payment for services perspective but from fines, compensations and errors probabilities too. Errors of I and II types in rules enforcement are analyzed in relation to analogous errors in rules design with some implication for antimonopoly issues.

Suggested Citation

  • Shastitko, A., 2011. "Errors of I and II Types in Economic Exchanges with Third Party Enforcement," Journal of the New Economic Association, New Economic Association, issue 10, pages 125-148.
    • Handle: RePEc:nea:journl:y:2011:i:10:p:125-148
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    References listed on IDEAS

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    Cited by:

    1. Shastitko, Andrey & Golovanova, Svetlana, 2016. "Meeting blindly… Is Austrian economics useful for dynamic capabilities theory?," Russian Journal of Economics, Elsevier, vol. 2(1), pages 86-110.
    2. Kryuchkova, P. & Avdasheva, S., 2012. "Public and Private Enforcement of Law under the High Risk of Type I Errors: the Russian Case," Journal of the New Economic Association, New Economic Association, vol. 15(3), pages 114-140.
    3. Andrei Y. Shastitko & Svetlana V. Golovanova, 2014. "Collusion in markets characterized by one large buyer: lessons learned from an antitrust case in Russia," HSE Working papers WP BRP 49/EC/2014, National Research University Higher School of Economics.
    4. Shastitko, A. & Kurdin, A. & Filippova, I., 2020. "Structural alternatives of the gas transportation organization through an insulated pipeline," Journal of the New Economic Association, New Economic Association, vol. 47(3), pages 128-156.
    5. Shastitko, A. & Kurdin, A., 2014. "Protection of Intellectual Property Rights and Competition Policy: Seeking for a Better Balance," Journal of the New Economic Association, New Economic Association, vol. 21(1), pages 111-135.
    6. Golovanova, S., 2013. "Competition Restriction Problem in the Markets Linked to the Markets of Essential Facilities," Journal of the New Economic Association, New Economic Association, vol. 20(4), pages 110-132.

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    More about this item

    Keywords

    errors of I and II types; rules enforcement; prisoners’ dilemma; coordination and distributive aspects of institutions;
    All these keywords.

    JEL classification:

    • D60 - Microeconomics - - Welfare Economics - - - General
    • H40 - Public Economics - - Publicly Provided Goods - - - General
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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