Private Versus Public Antitrust Enforcement: A Strategic Analysis
AbstractWe compare private and public enforcement of the antitrust laws in a simple strategic model of antitrust crime and lawsuit. The model highlights the tradeoff that private firms are ex ante more likely than the government to be informed about actual antitrust violations, but are also more likely to use the antitrust laws strategically, to the disadvantage of consumers. With coupled damages (according to which the plaintiff receives what the defendant pays), if the court is sufficiently accurate, adding private to public enforcement always increases social welfare, while if the court is less accurate, it increases welfare only if the government is sufficiently inefficient in litigation. Moreover, pure private enforcement is never strictly optimal. However, in general, achieving the welfare-maximizing outcome requires private enforcement with damages that are both multiplied and decoupled.
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Bibliographic InfoPaper provided by Department of Economics, Emory University (Atlanta) in its series Emory Economics with number 0523.
Date of creation: Aug 2005
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-10-16 (All new papers)
- NEP-LAW-2005-10-18 (Law & Economics)
- NEP-MIC-2005-10-16 (Microeconomics)
- NEP-REG-2005-10-23 (Regulation)
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- Aldo González & Alejandro Micco, 2013. "Private vs Public Antitrust Enforcement: Evidence from Chile," Working Papers wp378, University of Chile, Department of Economics.
- Kryuchkova, P. & Avdasheva, S., 2012. "Public and Private Enforcement of Law under the High Risk of Type I Errors: the Russian Case," Journal of the New Economic Association, New Economic Association, vol. 15(3), pages 114-140.
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