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Commitments in Antitrust

Author

Listed:
  • Philippe Choné
  • Saïd Souam

    (EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)

  • Arnold Vialfont

Abstract

Competition agencies have the power to close an antitrust case in return for the commitment to end the alleged infringement. We examine how such a procedure affects deterrence and consumer welfare. We first show that it lowers the deterrent effect of competition policy. However, under asymmetric information, commitments may enhance consumer surplus with shortened proceedings and avoidance of trial type-II errors. The variation of consumer harm w.r.t. the firm's gain from the practice determines the optimal usage frequency of this negotiation tool. Finally, we show that trial and commitments may be complements as the latter is not always an answer to a lack of efficiency of the agency.

Suggested Citation

  • Philippe Choné & Saïd Souam & Arnold Vialfont, 2012. "Commitments in Antitrust," Working Papers hal-04141127, HAL.
    • Handle: RePEc:hal:wpaper:hal-04141127
    Note: View the original document on HAL open archive server: https://hal.science/hal-04141127v1
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    References listed on IDEAS

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    Cited by:

    1. Budzinski Oliver & Kuchinke Björn A., 2012. "Deal or No Deal? Consensual Arrangements as an Instrument of European Competition Policy," Review of Economics, De Gruyter, vol. 63(3), pages 265-292, December.
    2. Choné, Philippe & Souam, Saïd & Vialfont, Arnold, 2014. "On the optimal use of commitment decisions under European competition law," International Review of Law and Economics, Elsevier, vol. 37(C), pages 169-179.

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    Keywords

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    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices

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