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Must Trust Bust?

Author

Listed:
  • Møllgaard, Peter

    (Department of Economics, Copenhagen Business School)

Abstract

Our trust in competition policy is based on faith in markets. When markets are oligopolies, already classical economists’ trust in competition busted: Oligopolies carry the seeds of collusion. To develop, collusion needs trust between firms. But new leniency programmes are designed to bust that trust. I discuss when trust busters are likely to succeed and when trust prevails.

Suggested Citation

  • Møllgaard, Peter, 2002. "Must Trust Bust?," Working Papers 02-2002, Copenhagen Business School, Department of Economics.
  • Handle: RePEc:hhs:cbsnow:2002_002
    as

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    File URL: http://openarchive.cbs.dk/cbsweb/handle/10398/7646
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    References listed on IDEAS

    as
    1. Polinsky, A Mitchell & Shavell, Steven, 1992. "Enforcement Costs and the Optimal Magnitude and Probability of Fines," Journal of Law and Economics, University of Chicago Press, vol. 35(1), pages 133-148, April.
    2. Albaek, Svend & Mollgaard, Peter & Overgaard, Per B, 1997. "Government-Assisted Oligopoly Coordination? A Concrete Case," Journal of Industrial Economics, Wiley Blackwell, vol. 45(4), pages 429-443, December.
    3. H. Peter Møllgaard & Per Baltzer Overgaard, 2001. "Market Transparency and Competition Policy," Rivista di Politica Economica, SIPI Spa, vol. 91(4), pages 11-64, April-May.
    4. Kai-Uwe Kühn, 2001. "Fighting collusion by regulating communication between firms," Economic Policy, CEPR;CES;MSH, vol. 16(32), pages 167-204, April.
    5. H. Peter Møllgaard & Per Baltzer Overgaard, 1999. "Market Transparency: A Mixed Blessing?," CIE Discussion Papers 1999-15, University of Copenhagen. Department of Economics. Centre for Industrial Economics, revised Feb 2000.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Competition policy; Oligopolies; Collusion; Trust; Leniency programmes;

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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