IDEAS home Printed from
   My bibliography  Save this paper

Antitrust enforcement policy and markets interaction: targeted or concerted interventions ?


  • POUYET, Jerôme
  • VEROUDEN, Vincent


We study the design of antitrust intervention policy in presence of horizontally imperfectly differentiated industries. Firms in a given industry may decide to collude, but inter-industry collusion is assumed not to be possible. We find that the enforcement policy depends critically on the nature of the differentation and of the competition between industries. With substitutes, the intervention policy should be targeted when firms are Cournot competitors. Indeed, in this case, enforcing a competitive behavior from one industry has a positive spill-over on the incentive to collude in the other industry: the stronger the substitutability, the more targeted the intervention. However, with Bertrand competition and sufficiently homogenous products, even two collusive industries make almost no profits. In this case, we show that the intervention is concerted across industries and decreases with the substitutability between products. By contrast, with complements, these probabilities must be equal across markets since enforcing a competitive behavior in one industry reinforces the other industry's incentive to collude. This result carries over to the situation of vertically linked industries where outputs are technological complements. For sufficiently large degrees of complementarity, the antitrust authority is forced to intervene with probability one in both markets. These results do no longer depend on the nature of the competition.

Suggested Citation

  • POUYET, Jerôme & VEROUDEN, Vincent, 2002. "Antitrust enforcement policy and markets interaction: targeted or concerted interventions ?," LIDAM Discussion Papers CORE 2002028, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  • Handle: RePEc:cor:louvco:2002028

    Download full text from publisher

    File URL:
    Download Restriction: no


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

    Cited by:

    1. Cécile Aubert & Jérôme Pouyet, 2004. "Competition policy, regulation and the institutional design of industry supervision," Recherches économiques de Louvain, De Boeck Université, vol. 70(2), pages 153-168.
    2. Raúl Bajo-Buenestado & Dodge Cahan, 2015. "Unification of Oligopolistic Markets for a Homogeneous Good in the Presence of an Antitrust Commission," Journal of Industry, Competition and Trade, Springer, vol. 15(3), pages 239-256, September.

    More about this item


    antitrust intervention; product differentiation;

    JEL classification:

    • L4 - Industrial Organization - - Antitrust Issues and Policies


    Access and download statistics


    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:cor:louvco:2002028. 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: . General contact details of provider: .

    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.

    We have no bibliographic references for this item. You can help adding them by using 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Alain GILLIS (email available below). General contact details of provider: .

    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.