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The Competition between Competition Rules

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  • Hans-Werner Sinn

Abstract

Open borders imply systems competition. This paper studies the implications of systems competition for the national co mpetition rules. It is shown that an equilibrium where all countries retain their antitrust laws does not exist, since abolishing this law makes it possible for a single country to establish a cartel that successfully appropriates foreign business profi t s. Instead of such an equilibrium, a deregulation race is likely to emerge in which all but the last country repeal their antitrust laws. The deregulation race results in a chain of Stackelberg leadership positions taken over by national cartels that rend ers lower profits and higher consumer rents than would have been the case with harmonization of the antitrust laws.

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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 192.

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Date of creation: 1999
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Handle: RePEc:ces:ceswps:_192

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  1. James A. Brander & Barbara J. Spencer, 1980. "Tariffs and the Extraction of Foreign Monopoly Rents under Potential Entry," Working Papers, Queen's University, Department of Economics 414, Queen's University, Department of Economics.
  2. David M. Kreps & Jose A. Scheinkman, 1983. "Quantity Precommitment and Bertrand Competition Yield Cournot Outcomes," Bell Journal of Economics, The RAND Corporation, The RAND Corporation, vol. 14(2), pages 326-337, Autumn.
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Cited by:
  1. Budzinski, Oliver, 2012. "International antitrust institutions," Ilmenau Economics Discussion Papers, Ilmenau University of Technology, Institute of Economics 72, Ilmenau University of Technology, Institute of Economics.
  2. Kathrin Isele, 2003. "Fusionskontrolle im Standortwettbewerb," Volkswirtschaftliche Diskussionsbeiträge, Universität Potsdam, Wirtschafts- und Sozialwissenschaftliche Fakultät 51, Universität Potsdam, Wirtschafts- und Sozialwissenschaftliche Fakultät.

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