We apply Png's (1983) model to antitrust suits to determine the effects of private suits on government suits and vice versa. In equilibrium, a defendant can probabilistically signal a strong case by not offering to settle. A violator's incentive to signal a strong case to deter a treble damage suit forces the government to pursue more trials than it would otherwise. Private plaintiffs are more likely to settle following a government suit than otherwise, but they win a trial with the same probability regardless of whether there was a previous government suit. Data on private suits support the latter two contentions.
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Volume (Year): 27 (1996) Issue (Month): 4 (Winter) Pages: 770-786 Download reference. The following formats are available: HTML
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Schinkel, M.P. & Tuinstra, J. & Rueggeberg, J., 2004.
"Illinois Walls,"
CeNDEF Working Papers
04-03, Universiteit van Amsterdam, Center for Nonlinear Dynamics in Economics and Finance.
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Schinkel,Maarten Pieter & Rüggeberg,Jakob & Tuinstra,Jan, 2003.
"Illinois Walls,"
Research Memoranda
027, Maastricht : METEOR, Maastricht Research School of Economics of Technology and Organization.
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