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How to avoid regulatory antitrust scrutiny: The behavioral defense

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  • Agnihotri, Arpita

Abstract

Firms, especially those with high profit margins, are often scrutinized by regulatory authorities that suspect them of anticompetitive practices such as cartel formation. In this article I introduce a behavioral approach of competing that suggests firms with even the highest of margins are actually competing aggressively against each other, rather than colluding as the regulatory authorities might suggest. Firms using the behavioral approach can signal to antitrust authorities that their intent is not to restrain competition. Four mechanisms show this competitive orientation: (1) competitive intensity, (2) competitive complexity, (3) attack imitation, and (4) competitive action speed.

Suggested Citation

  • Agnihotri, Arpita, 2015. "How to avoid regulatory antitrust scrutiny: The behavioral defense," Business Horizons, Elsevier, vol. 58(4), pages 441-447.
    • Handle: RePEc:eee:bushor:v:58:y:2015:i:4:p:441-447
    DOI: 10.1016/j.bushor.2015.04.002
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    References listed on IDEAS

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    1. Jan Boone, 2008. "A New Way to Measure Competition," Economic Journal, Royal Economic Society, vol. 118(531), pages 1245-1261, August.
    2. Ghosal, Vivek & Gallo, Joseph, 2001. "The cyclical behavior of the Department of Justice's antitrust enforcement activity," International Journal of Industrial Organization, Elsevier, vol. 19(1-2), pages 27-54, January.
    3. Boone, J., 2004. "A New Way to Measure Competition," Other publications TiSEM 961dc10b-580e-4d5e-9e9d-b, Tilburg University, School of Economics and Management.
    4. Michael A. Utton, 2011. "Cartels and Economic Collusion," Books, Edward Elgar Publishing, number 14208.
    5. Grimm, Curtis M. & Lee, Hun & Smith, Ken G., 2005. "Strategy As Action: Competitive Dynamics and Competitive Advantage," OUP Catalogue, Oxford University Press, number 9780195161441.
    6. Boone, J., 2004. "A New Way to Measure Competition," Other publications TiSEM 1872e066-b7ba-4b53-949d-4, Tilburg University, School of Economics and Management.
    Full references (including those not matched with items on IDEAS)

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