The Competition Between Competition Rules
AbstractOpen borders imply systems competition. This paper studies the implications of systems competition for the national competition rules. It is shown that an equilibrium where all countries retain their antitrust laws does not exist, since abolishing this law makes it possible for a single country to establish a cartel that successfully appropriates foreign business profits. Instead of such an equilibrium, a deregulation race is likely to emerge in which all but the last country repeal their antitrust laws. The deregulation race results in a chain of Stackelberg leadership positions taken over by national cartels that renders lower profits and higher consumer rents than would have been the case with harmonization of the antitrust laws.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 7273.
Date of creation: Jul 1999
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Other versions of this item:
- H7 - Public Economics - - State and Local Government; Intergovernmental Relations
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
This paper has been announced in the following NEP Reports:
- NEP-ALL-1999-08-01 (All new papers)
- NEP-CDM-1999-08-04 (Collective Decision-Making)
- NEP-IND-1999-08-04 (Industrial Organization)
- NEP-MIC-1999-08-04 (Microeconomics)
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.:
- James A. Brander & Barbara J. Spencer, 1981.
"Tariffs and the Extraction of Foreign Monopoly Rents under Potential Entry,"
Canadian Journal of Economics,
Canadian Economics Association, vol. 14(3), pages 371-89, August.
- James A. Brander & Barbara J. Spencer, 1980. "Tariffs and the Extraction of Foreign Monopoly Rents under Potential Entry," Working Papers 414, Queen's University, Department of Economics.
- Budzinski, Oliver, 2012. "International antitrust institutions," Ilmenau Economics Discussion Papers 72, Ilmenau University of Technology, Institute of Economics.
- Kathrin Isele, 2003. "Fusionskontrolle im Standortwettbewerb," Volkswirtschaftliche DiskussionsbeitrÃ¤ge 51, Universität Potsdam, Wirtschafts- und Sozialwissenschaftliche Fakultät.
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