Crime and punishment: When tougher antitrust enforcement leads to higher overcharge
AbstractThe economics of crime and punishment postulates that higher punishment leads to lower crime levels, or less severe crime. It is how- ever hard to get empirical support for this rather intuitive relationship. This paper offers a model that can contribute to explain why this is the case. We show that if criminals can spend resources to reduce the probability of being detected, then a higher general punishment level can increase the crime level. In the context of antitrust enforcement, the model shows that competition authorities who attempt to fight cartels by means of tougher sanctions for all offenders may actually lead cartels to increase their overcharge when leniency programs are in place.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University of Stavanger in its series UiS Working Papers in Economics and Finance with number 2013/2.
Length: 32 pages
Date of creation: 06 Mar 2013
Date of revision:
Antitrust Enforcement; Leniency; Economics of Crime;
Other versions of this item:
- Jensen, Sissel & Kvaløy, Ola & Olsen, Trond E. & Sorgard, Lars, 2013. "Crime and punishment: When tougher antitrust enforcement leads to higher overcharge," Discussion Paper Series in Economics 4/2013, Department of Economics, Norwegian School of Economics.
- Jensen, Sissel & Kvaløy, Ola & Olsen, Trond E. & Sørgard, Lars, 2013. "Crime and punishment: When tougher antitrust enforcement leads to higher overcharge," Discussion Papers 2013/5, Department of Business and Management Science, Norwegian School of Economics.
- A10 - General Economics and Teaching - - General Economics - - - General
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Mohamed Jellal & Saïd Souam, 2004. "Delegation, Incentives and Antitrust Enforcement," Working Papers 2004-41, Centre de Recherche en Economie et Statistique.
- Eric Langlais, 2007.
"Detection avoidance and deterrence: some paradoxical arithmetics,"
Working Papers of BETA
2007-06, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
- Eric Langlais, 2008. "Detection Avoidance and Deterrence: Some Paradoxical Arithmetic," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 10(3), pages 371-382, 06.
- Langlais, Eric, 2006. "Detection avoidance and deterrence: some paradoxical arithmetics," MPRA Paper 1148, University Library of Munich, Germany, revised 10 Dec 2006.
- Stigler, George J, 1970.
"The Optimum Enforcement of Laws,"
Journal of Political Economy,
University of Chicago Press, vol. 78(3), pages 526-36, May-June.
- Chen, Zhijun & Rey, Patrick, 2007. "On the Design of Leniency Programs," IDEI Working Papers 452, Institut d'Économie Industrielle (IDEI), Toulouse, revised Jan 2012.
- Gary S. Becker, 1974.
"Crime and Punishment: An Economic Approach,"
in: Essays in the Economics of Crime and Punishment, pages 1-54
National Bureau of Economic Research, Inc.
- 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.
- Aubert, Cecile & Rey, Patrick & Kovacic, William E., 2006.
"The impact of leniency and whistle-blowing programs on cartels,"
International Journal of Industrial Organization,
Elsevier, vol. 24(6), pages 1241-1266, November.
- Aubert, Cécile & Kovacic, William & Rey, Patrick, 2006. "The Impact of Leniency and Whistleblowing Programs on Cartels," Open Access publications from University of Toulouse 1 Capitole http://neeo.univ-tlse1.fr, University of Toulouse 1 Capitole.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Bernt Arne Odegaard).
If references are entirely missing, you can add them using this form.