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The Genesis Of Cartel Investigations: Some Insights From Examining The Dynamic Interrelationships Between U.S. Civil And Criminal Antitrust Investigations

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  • Vivek Ghosal

Abstract

The U.S. Department of Justice has prosecuted over 1600 criminal antitrust (price-fixing and related) cases since 1970. Yet we know precious little about the true genesis of these investigations. This paper uses the vector-autoregression methodology to examine the dynamic interrelationships between the various criminal and civil antitrust enforcement variables. A key result is that the number of criminal prosecutions increases in the years immediately following an increase in the number of civil cases, suggesting that merger reviews and other civil investigations may alert the antitrust authorities to criminal antitrust activities. To the best of my knowledge, this is the first econometric analysis that demonstrates the quantitative size of this effect and the time lags in the relationship. Other findings include important dynamic interrelationships between grand jury investigations, the number of individuals and corporations prosecuted, and criminal cases, indicating that information unearthed during a given criminal investigation and prosecution often reveals information about other conspiracies leading to future investigations and prosecutions. Finally, the number of criminal cases prosecuted increases following an economic downturn. We relate this increase to the literature, which points to cartel instability during economic downturns.

Suggested Citation

  • Vivek Ghosal, 2008. "The Genesis Of Cartel Investigations: Some Insights From Examining The Dynamic Interrelationships Between U.S. Civil And Criminal Antitrust Investigations," Journal of Competition Law and Economics, Oxford University Press, vol. 4(1), pages 61-88.
    • Handle: RePEc:oup:jcomle:v:4:y:2008:i:1:p:61-88.
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    References listed on IDEAS

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    1. Jonathan B. Baker, 2003. "The Case for Antitrust Enforcement," Journal of Economic Perspectives, American Economic Association, vol. 17(4), pages 27-50, Fall.
    2. Ghosal, Vivek & Gallo, Joseph, 2001. "The cyclical behavior of the Department of Justice's antitrust enforcement activity," International Journal of Industrial Organization, Elsevier, vol. 19(1-2), pages 27-54, January.
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    Cited by:

    1. Catarina Marvão & Giancarlo Spagnolo, 2023. "Leniency Inflation, Cartel Damages, and Criminalization," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 63(2), pages 155-186, September.
    2. Valentiny, Pál, 2019. "Közgazdaságtan a jogalkalmazásban [Forensic economics]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(2), pages 134-162.
    3. Vivek Ghosal & D. Daniel Sokol, 2016. "Policy Innovations, Political Preferences, and Cartel Prosecutions," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 48(4), pages 405-432, June.

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