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On the choice of legal standards: a positive theory for comparative analysis

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  • Yannis Katsoulacos

    (London School of Economics
    Athens University of Economics and Business)

Abstract

In contrast to existing economic theory on the choice of legal standards in the enforcement of Competition Law, we develop a modelling framework that accounts explicitly for (a) Courts’ choices, given the substantive standard adopted and (b) Competition Authorities (CAs) setting legal standards anticipating Courts’ choices, recognizing that CAs place at least some weight on the implications of their choices for the outcome of the judicial review process and, hence, for their reputation. We then show why CAs may favor Per Se type standards (even when an error-minimising or welfare maximization approach would suggest the choice of an effects-based standard), with sub-optimal utilization of economic analysis, how this choice is affected by the Courts’ substantive standards, why the legal standards for any given conduct may differ between countries, why there may be a U-shaped empirical relationship between legal standards and the probability that the CA’s decisions are annuled and how the choice of standards affects other aspects of enforcement, such as the number of investigations undertaken.

Suggested Citation

  • Yannis Katsoulacos, 2019. "On the choice of legal standards: a positive theory for comparative analysis," European Journal of Law and Economics, Springer, vol. 48(2), pages 125-165, October.
    • Handle: RePEc:kap:ejlwec:v:48:y:2019:i:2:d:10.1007_s10657-019-09616-7
    DOI: 10.1007/s10657-019-09616-7
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    References listed on IDEAS

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    Cited by:

    1. Yannis Katsoulacos & Svetlana Avdasheva & Svetlana Golovanova, 2021. "Determinants of the (Slow) Development of Effect-Based Competition Enforcement: Testing the Impact of Judicial Review on the Choice of Legal Standards by Competition Authorities," Journal of Industry, Competition and Trade, Springer, vol. 21(1), pages 103-122, March.
    2. Alain Marciano & Giovanni Ramello & Hans-Bernd Schaefer, 2020. "Foreword, special issue: economic analysis of litigations 2," European Journal of Law and Economics, Springer, vol. 50(1), pages 1-5, August.
    3. Yannis Katsoulacos & Galateia Makri & Eleni Metsiou, 2019. "Antitrust Enforcement in Europe in the Last 25 Years: Developments and Challenges," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 55(1), pages 5-26, August.
    4. Avdasheva, Svetlana & Golovanova, Svetlana & Katsoulacos, Yannis, 2019. "The role of judicial review in developing evidentiary standards: The example of market analysis in Russian competition law enforcement," International Review of Law and Economics, Elsevier, vol. 58(C), pages 101-114.
    5. Yannis Katsoulacos & David Ulph, 2023. "Choosing legal rules or standards in antitrust enforcement: A proposal for extending and facilitating the use of the decision‐theoretic approach," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(4), pages 1876-1894, June.

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    More about this item

    Keywords

    Antitrust enforcement; Effects-based; Per Se; Economic analysis; Judicial review;
    All these keywords.

    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General

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