The Competition between Competition Rules
AbstractOpen 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 InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 192.
Date of creation: 1999
Date of revision:
Other versions of this item:
- H7 - Public Economics - - State and Local Government; Intergovernmental Relations
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
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- James A. Brander & Barbara J. Spencer, 1981.
"Tariffs and the Extraction of Foreign Monopoly Rents under Potential Entry,"
Canadian Journal of Economics,
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- Kathrin Isele, 2003. "Fusionskontrolle im Standortwettbewerb," Volkswirtschaftliche DiskussionsbeitrÃ¤ge 51, Universität Potsdam, Wirtschafts- und Sozialwissenschaftliche Fakultät.
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