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Deterrence in Competition Law

Author

Listed:
  • Buccirossi, Paolo
  • Ciari, Lorenzo
  • Duso, Tomaso
  • Spagnolo, Giancarlo
  • Vitale, Cristiana

Abstract

This paper provides a comprehensive discussion of the deterrence properties of a competition policy regime. On the basis of the economic theory of law enforcement we identify several factors that are likely to affect its degree of deterrence: 1) sanctions and damages; 2) financial and human resources; 3) powers during the investigation; 4) quality of the law; 5) independence; and 6) separation of power. We then discuss how to measure deterrence. We review the literature that use surveys to solicit direct information on changes in the behavior of firms due to the threats posed by the enforcement of antitrust rules, and the literature based on the analysis of hard data. We finally argue that the most challenging task, both theoretically and empirically, is how to distinguish between “good†deterrence and “bad†deterrence.

Suggested Citation

  • Buccirossi, Paolo & Ciari, Lorenzo & Duso, Tomaso & Spagnolo, Giancarlo & Vitale, Cristiana, 2009. "Deterrence in Competition Law," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 285, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    • Handle: RePEc:trf:wpaper:285
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    File URL: https://epub.ub.uni-muenchen.de/13269/1/285.pdf
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    Other versions of this item:

    • Paolo Buccirossi & Lorenzo Ciari & Tomaso Duso & Giancarlo Spagnolo & Cristiana Vitale, 2009. "Deterrence in Competition Law," CIG Working Papers SP II 2009-14, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG), revised Oct 2009.

    Citations

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    Cited by:

    1. Šastitko, Andrej E., 2013. "Effects of third party errors," EconStor Preprints 121747, ZBW - Leibniz Information Centre for Economics.
    2. Barbara Baarsma & Ron Kemp & Rob Noll & Jo Seldeslachts, 2012. "Let’s Not Stick Together: Anticipation of Cartel and Merger Control in The Netherlands," De Economist, Springer, vol. 160(4), pages 357-376, December.
    3. Shastitko, Andrey, 2014. "Effects of the Third Party Errors," Published Papers re9021, Russian Presidential Academy of National Economy and Public Administration.
    4. 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.
    5. Khemla Prishnee Armoogum & Stephen Davies & Franco Mariuzzo, 2017. "Cartel enforcement and deterrence over the life of a Competition Authority," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2017-04, Centre for Competition Policy, University of East Anglia, Norwich, UK..
    6. Aditya Bhattacharjea & Oindrila De, 2021. "India’s Cartel Penalty Practices, Optimal Restitution and Deterrence," IEG Working Papers 424, Institute of Economic Growth.

    More about this item

    Keywords

    Competition Policy; Law Enforcement; Deterrence;
    All these keywords.

    JEL classification:

    • 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
    • L4 - Industrial Organization - - Antitrust Issues and Policies

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