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Optimal enforcement of competition policy : the commitments procedure under uncertainty

Author

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  • GAUTIER, Axel

    (Université catholique de Louvain, CORE, Belgium)

  • PETIT, Nicolas

    (University of Liege)

Abstract

Since the introduction of a formal commitments procedure in EU an- titrust policy (Article 9 of Council Regulation 1/2003), the European Commission has extensively settled cases of alleged anticompetitive practices. In this paper, we use a formal model of law enforcement (Be- bchuk, 1984; Shavell, 1988) to identify the optimal procedure to resolve cases in a context of uncertainty related to the law (L-uncertainty) and to the facts (F-uncertainty). We show that commitments are subop- timal when L-uncertainty is important. Furthermore, the generalized use of commitments creates an additional risk of under-enforcement when F-uncertainty is significant.

Suggested Citation

  • GAUTIER, Axel & PETIT, Nicolas, 2014. "Optimal enforcement of competition policy : the commitments procedure under uncertainty," LIDAM Discussion Papers CORE 2014063, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  • Handle: RePEc:cor:louvco:2014063
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    Cited by:

    1. Godin, M. & Hindriks, J., 2015. "A Review of Critical Issues on Tax Design and Tax Administration in a Global Economy and Developing Countries," LIDAM Discussion Papers CORE 2015028, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    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.

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    More about this item

    Keywords

    Competition Policy; European Commission; Settlements; Commitments; Law Enforcement;
    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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