The Distortive Effects of Antitrust Fines Based on Revenue
AbstractIn most jurisdictions, antitrust fines are based on affected commerce rather than on collusive profits, and in some others, caps on fines are introduced based on total firm sales rather than on affected commerce. We uncover a number of distortions that these policies generate, propose simple models to characterise their comparative static properties, and quantify them with simulations based on market data. We conclude by discussing the obvious need to depart from these distortive rules-of-thumb that appear to have the potential to substantially reduce social welfare.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 9518.
Date of creation: Jun 2013
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Other versions of this item:
- Spagnolo, Giancarlo & Bageri, Vasiliki & Katsoulacos, Yannis, 2012. "The Distortive Effects of Antitrust Fines Based on Revenue," SITE Working Paper Series 22, Stockholm Institute of Transition Economics, Stockholm School of Economics.
- Vasiliki Bageri & Yannis Katsoulacos & Giancarlo Spagnolo, 2013. "The distortive effects of antitrust fines based on revenue," Working Papers 153, Bank of Greece.
- K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
- L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
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