IDEAS home Printed from https://ideas.repec.org/a/bla/jindec/v57y2009i3p372-409.html
   My bibliography  Save this article

PRIVATE ANTITRUST ENFORCEMENT IN THE PRESENCE OF PRE-TRIAL BARGAINING -super-

Author

Listed:
  • SYLVAIN BOURJADE
  • PATRICK REY
  • PAUL SEABRIGHT

Abstract

We study the effect of encouraging private actions for breaches of competition law. We develop a model of litigation and settlement with asymmetric information. We show that screening liable from non-liable defendants requires the Court to restrict the rules governing admissible evidence. We study how to design the rules so as to enhance the role of private litigation in antitrust enforcement and prove that increasing damages is better than reducing costs of initiating suits. We also find large benefits from introducing a system of compensation for defendants found non-liable, paid by unsuccessful plaintiffs. Copyright 2009 The Authors. Journal compilation 2009 Blackwell Publishing Ltd. and the Editorial Board of The Journal of Industrial Economics.

Suggested Citation

  • Sylvain Bourjade & Patrick Rey & Paul Seabright, 2009. "PRIVATE ANTITRUST ENFORCEMENT IN THE PRESENCE OF PRE-TRIAL BARGAINING -super-," Journal of Industrial Economics, Wiley Blackwell, vol. 57(3), pages 372-409, September.
  • Handle: RePEc:bla:jindec:v:57:y:2009:i:3:p:372-409
    as

    Download full text from publisher

    File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1467-6451.2009.00383.x
    File Function: link to full text
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Lucian Arye Bebchuk, 1984. "Litigation and Settlement under Imperfect Information," RAND Journal of Economics, The RAND Corporation, vol. 15(3), pages 404-415, Autumn.
    2. Demougin, Dominique & Fluet, Claude, 2006. "Preponderance of evidence," European Economic Review, Elsevier, vol. 50(4), pages 963-976, May.
    3. Salant, Stephen W, 1987. "Treble Damage Awards in Private Lawsuits for Price Fixing," Journal of Political Economy, University of Chicago Press, vol. 95(6), pages 1326-1336, December.
    4. Baker, Scott & Mezzetti, Claudio, 2001. "Prosecutorial Resources, Plea Bargaining, and the Decision to Go to Trial," Journal of Law, Economics, and Organization, Oxford University Press, vol. 17(1), pages 149-167, April.
    5. Reinganum, Jennifer F, 1988. "Plea Bargaining and Prosecutorial Discretion," American Economic Review, American Economic Association, vol. 78(4), pages 713-728, September.
    6. Janusz A. Ordover & Ariel Rubinstein, 1986. "A Sequential Concession Game with Asymmetric Information," The Quarterly Journal of Economics, Oxford University Press, vol. 101(4), pages 879-888.
    7. Gary S. Becker & George J. Stigler, 1974. "Law Enforcement, Malfeasance, and Compensation of Enforcers," The Journal of Legal Studies, University of Chicago Press, vol. 3(1), pages 1-18, January.
    8. Ezra Friedman & Abraham L. Wickelgren, 2006. "Bayesian Juries and The Limits to Deterrence," Journal of Law, Economics, and Organization, Oxford University Press, vol. 22(1), pages 70-86, April.
    9. Dominique Demougin & Claude Fluet, 2008. "Rules of proof, courts, and incentives," RAND Journal of Economics, RAND Corporation, vol. 39(1), pages 20-40.
    10. Gianmaria Martini & Cinzia Rovesti, 2004. "Antitrust policy and price collusion. Public agencies vs delegation," Recherches économiques de Louvain, De Boeck Université, vol. 70(2), pages 127-151.
    11. A. Mitchell Polinsky & Daniel L. Rubinfeld, 1996. "Optimal Awards and Penalties When the Probability of Prevailing Varies Among Plaintiffs," RAND Journal of Economics, The RAND Corporation, vol. 27(2), pages 269-280, Summer.
    12. I.P.L. P'ng, 1983. "Strategic Behavior in Suit, Settlement, and Trial," Bell Journal of Economics, The RAND Corporation, vol. 14(2), pages 539-550, Autumn.
    13. Andrew F. Daughety & Jennifer F. Reinganum, 2005. "Economic Theories of Settlement Bargaining," Vanderbilt University Department of Economics Working Papers 0508, Vanderbilt University Department of Economics.
    14. Besanko, David & Spulber, Daniel F, 1990. "Are Treble Damages Neutral? Sequential Equilibrium and Private Antitrust Enforcement," American Economic Review, American Economic Association, vol. 80(4), pages 870-887, September.
    15. In-Koo Cho & David M. Kreps, 1987. "Signaling Games and Stable Equilibria," The Quarterly Journal of Economics, Oxford University Press, vol. 102(2), pages 179-221.
    16. Barry Nalebuff, 1987. "Credible Pretrial Negotiation," RAND Journal of Economics, The RAND Corporation, vol. 18(2), pages 198-210, Summer.
    17. William M. Landes, 1974. "An Economic Analysis of the Courts," NBER Chapters,in: Essays in the Economics of Crime and Punishment, pages 164-214 National Bureau of Economic Research, Inc.
    18. Wickelgren Abraham L., 2004. "A Model of Welfare-Reducing Settlement," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 3(1), pages 1-22, May.
    19. Hugh C. Briggs III & Kathleen D. Huryn & Mark E. McBride, 1996. "Treble Damages and the Incentive to Sue and Settle," RAND Journal of Economics, The RAND Corporation, vol. 27(4), pages 770-786, Winter.
    20. Andrew F. Daughety & Jennifer F. Reinganum, 2000. "Appealing Judgments," RAND Journal of Economics, The RAND Corporation, vol. 31(3), pages 502-526, Autumn.
    21. Grossman, Gene M & Katz, Michael L, 1983. "Plea Bargaining and Social Welfare," American Economic Review, American Economic Association, vol. 73(4), pages 749-757, September.
    22. Katz, Avery, 1990. "The effect of frivolous lawsuits on the settlement of litigation," International Review of Law and Economics, Elsevier, vol. 10(1), pages 3-27, May.
    23. Jennifer F. Reinganum & Louise L. Wilde, 1986. "Settlement, Litigation, and the Allocation of Litigation Costs," RAND Journal of Economics, The RAND Corporation, vol. 17(4), pages 557-566, Winter.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Tim Reuter, 2016. "Private antitrust enforcement and the role of harmed parties in public enforcement," European Journal of Law and Economics, Springer, vol. 41(3), pages 479-507, June.
    2. Grajzl, Peter & Baniak, Andrzej, 2018. "Private enforcement, corruption, and antitrust design," Journal of Comparative Economics, Elsevier, vol. 46(1), pages 284-307.
    3. Luke Garrod & Bruce Lyons, 2016. "Early Settlement in European Merger Control," Journal of Industrial Economics, Wiley Blackwell, vol. 64(1), pages 27-63, March.
    4. Ronald W. Cotterill, 2010. "Antitrust economic analysis in food marketing channels: a global perspective," Agricultural Economics, International Association of Agricultural Economists, vol. 41(s1), pages 83-91, November.
    5. Bourjade, Sylvain, 2009. "The role of private litigation in antitrust enforcement," MPRA Paper 34818, University Library of Munich, Germany.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jindec:v:57:y:2009:i:3:p:372-409. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0022-1821 .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.