Cartel Organization and Antitrust Enforcement
AbstractThis paper incorporates the economic theory of organizations into the framework of public law enforcement, and characterizes the dual-coalition structure of cartel organization that allows us to highlight the strategic interactions between cartel participants under different antitrust policies. We show that delegation of authorities over collusive decisions from top executives to subordinates can mitigate the temptation of renege on collusive relationships and thus contributes to facilitating collusion. This result parallels the insights in Baker, Gibbons and Murphy (2002, 2006) which find that the optimal allocation of decision rights is to minimize the maximum temptation to renege on relational contracts. Moreover, the efficiency gains of delegation in facilitating collusion can be mitigated when the corporate leniency program is introduced, in particular whenever it is unlikely to detect cartels absent leniency and the corporate liability is muc more significant than individual liability.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Centre for Competition Policy, University of East Anglia in its series Working Papers with number 08-21.
Length: 30 pages
Date of creation: Apr 2008
Date of revision:
cartel organization; antitrust enforcement; leniency programs;
Find related papers by JEL classification:
- D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
- K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
- L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-04-21 (All new papers)
- NEP-BEC-2008-04-21 (Business Economics)
- NEP-COM-2008-04-21 (Industrial Competition)
- NEP-CTA-2008-04-21 (Contract Theory & Applications)
- NEP-LAW-2008-04-21 (Law & Economics)
- NEP-REG-2008-04-21 (Regulation)
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Aubert, Cécile, 2009. "Managerial Effort Incentives and Market Collusion," TSE Working Papers 09-127, Toulouse School of Economics (TSE).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Cheryl Whittkaer) The email address of this maintainer does not seem to be valid anymore. Please ask Cheryl Whittkaer to update the entry or send us the correct address.
If references are entirely missing, you can add them using this form.