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.
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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. & 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.
- 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.
- A10 - General Economics and Teaching - - General Economics - - - General
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