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The Anticompetitive Effects of the Antitrust Policy

In: The Economics of Imperfect Markets

Author

Listed:
  • David Bartolini

    (Università Politecnica delle Marche
    Osservatorio per le Politiche Economiche Regionali (OPERA))

  • Alberto Zazzaro

    (Università Politecnica delle Marche
    Money and Finance Research Group (MoFiR) and CFEPSR)

Abstract

Few scholars have seriously considered the possibility that the very existence of an antitrust law might make markets less competitive. In this chapter, we provide a selective review of this thought-provoking literature. The focus of our analysis is on contributions within the limits of the neo-classical theory of firms and markets, pointing out that antitrust legislation can hinder price/output competition. Following this literature, the introduction of antitrust penalties or leniency programmes can have the perverse effect of stabilizing cartels and increasing their size, as these policies may raise the costs of deviating and/or renegotiating a collusive agreement.

Suggested Citation

  • David Bartolini & Alberto Zazzaro, 2010. "The Anticompetitive Effects of the Antitrust Policy," Contributions to Economics, in: Giorgio Calcagnini & Enrico Saltari (ed.), The Economics of Imperfect Markets, chapter 0, pages 213-232, Springer.
    • Handle: RePEc:spr:conchp:978-3-7908-2131-4_11
    DOI: 10.1007/978-3-7908-2131-4_11
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    References listed on IDEAS

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    1. Martin, Stephen, 2006. "Competition policy, collusion, and tacit collusion," International Journal of Industrial Organization, Elsevier, vol. 24(6), pages 1299-1332, November.
    2. Motta, Massimo & Polo, Michele, 2003. "Leniency programs and cartel prosecution," International Journal of Industrial Organization, Elsevier, vol. 21(3), pages 347-379, March.
    3. Joseph E. Harrington, Jr., 2004. "Cartel Pricing Dynamics in the Presence of an Antitrust Authority," RAND Journal of Economics, The RAND Corporation, vol. 35(4), pages 651-673, Winter.
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    Cited by:

    1. Bartolini David & Zazzaro Alberto, 2011. "The Impact of Antitrust Fines on the Formation of Collusive Cartels," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-30, September.

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