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The Unnoticed Difference between Antitrust and Competition Policy

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Abstract

This paper presents a model which focuses on differences between the competition policy of the EU and antitrust of the U.S. It introduces three versions – Neutral, American, and European. Two-stage game model takes the authority’s perspective and describes options and behavior of antitrust officials when a firm engages in non-price vertical agreement (possibly restraint). Optimal behavior is expressed as expected income of the authority (EIA) which is a function of probability of wrong decision(s) in the course of action. It takes into account specific preferences, different types of errors, fear of those errors, and harm they might cause. Comparison shows some unnoticed features and results slightly in favor of the EU.

Suggested Citation

  • Petra Luňáčková, 2011. "The Unnoticed Difference between Antitrust and Competition Policy," Working Papers IES 2011/38, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Dec 2011.
  • Handle: RePEc:fau:wpaper:wp2011_38
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    File URL: http://ies.fsv.cuni.cz/default/file/download/id/19025
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    More about this item

    Keywords

    competition policy; antitrust; non-price vertical restraints; National Competition Authority; game form;
    All these keywords.

    JEL classification:

    • L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts
    • L44 - Industrial Organization - - Antitrust Issues and Policies - - - Antitrust Policy and Public Enterprise, Nonprofit Institutions, and Professional Organizations
    • C79 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Other
    • D79 - Microeconomics - - Analysis of Collective Decision-Making - - - Other

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