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Deterrence in Competition Law

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  • Buccirossi, Paolo
  • Ciari, Lorenzo
  • Duso, Tomaso
  • Spagnolo, Giancarlo
  • Vitale, Cristiana

Abstract

This paper provides a comprehensive discussion of the deterrence properties of a competition policy regime. On the basis of the economic theory of law enforcement we identify several factors that are likely to affect its degree of deterrence: 1) sanctions and damages; 2) financial and human resources; 3) powers during the investigation; 4) quality of the law; 5) independence; and 6) separation of power. We then discuss how to measure deterrence. We review the literature that use surveys to solicit direct information on changes in the behavior of firms due to the threats posed by the enforcement of antitrust rules, and the literature based on the analysis of hard data. We finally argue that the most challenging task, both theoretically and empirically, is how to distinguish between “good†deterrence and “bad†deterrence.

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Bibliographic Info

Paper provided by Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich in its series Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems with number 285.

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Date of creation: Oct 2009
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Handle: RePEc:trf:wpaper:285

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Keywords: Competition Policy; Law Enforcement; Deterrence;

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Cited by:
  1. Shastitko, A., 2011. "Errors of I and II Types in Economic Exchanges with Third Party Enforcement," Journal of the New Economic Association, New Economic Association, issue 10, pages 125-148.

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