Crime and punishment: When tougher antitrust enforcement leads to higher overcharge
The economics of crime and punishment postulates that higher punishment leads to lower crime levels, or less severe crime. It is however hard to get empirical support for this intuitive relationship. This paper o¤ers a model that contributes to explain why this is the case. We show that if criminals can spend resources to reduce the probability of being detected, then a higher general punishment level can increase the crime level. In the context of antitrust enforcement, it is shown that competition authorities who attempt to …ght cartels by means of tougher sanctions for all o¤enders may actually lead cartels to increase their overcharge when leniency programs are in place.
|Date of creation:||18 Feb 2013|
|Contact details of provider:|| Postal: NHH, Department of Economics, Helleveien 30, N-5045 Bergen, Norway|
Phone: +47 55 959 277
Fax: 5595 9100
Web page: http://www.nhh.no/sam/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Zhijun Chen & Patrick Rey, 2013. "On the Design of Leniency Programs," Journal of Law and Economics, University of Chicago Press, vol. 56(4), pages 917-957.
- Mohamed Jellal & Saïd Souam, 2004. "Delegation, Incentives and Antitrust Enforcement," Working Papers 2004-41, Center for Research in Economics and Statistics.
- Joseph E. Harrington, 2008. "OPTIMAL CORPORATE LENIENCY PROGRAMS -super-," Journal of Industrial Economics, Wiley Blackwell, vol. 56(2), pages 215-246, June.
- Gary S. Becker, 1974. "Crime and Punishment: An Economic Approach," NBER Chapters,in: Essays in the Economics of Crime and Punishment, pages 1-54 National Bureau of Economic Research, Inc.
- Vasiliki Bageri & Yannis Katsoulacos & Giancarlo Spagnolo, 2013.
"The Distortive Effects of Antitrust Fines Based on Revenue,"
Royal Economic Society, vol. 123(11), pages 545-557, November.
- Spagnolo, Giancarlo & Bageri, Vasiliki & Katsoulacos, Yannis, 2012. "The Distortive Effects of Antitrust Fines Based on Revenue," SITE Working Paper Series 22, Stockholm Institute of Transition Economics, Stockholm School of Economics.
- Bageri, Vasiliki & Katsoulacos, Yannis & Spagnolo, Giancarlo, 2013. "The Distortive Effects of Antitrust Fines Based on Revenue," CEPR Discussion Papers 9518, C.E.P.R. Discussion Papers.
- Vasiliki Bageri & Yannis Katsoulacos & Giancarlo Spagnolo, 2013. "The distortive effects of antitrust fines based on revenue," Working Papers 153, Bank of Greece.
- George J. Stigler, 1974. "The Optimum Enforcement of Laws," NBER Chapters,in: Essays in the Economics of Crime and Punishment, pages 55-67 National Bureau of Economic Research, Inc.
- Aubert, Cecile & Rey, Patrick & Kovacic, William E., 2006.
"The impact of leniency and whistle-blowing programs on cartels,"
International Journal of Industrial Organization,
Elsevier, vol. 24(6), pages 1241-1266, November.
- Cécile Aubert, 2005. "The Impact of Leniency and Whistle-blowing Programs on Cartels," Post-Print hal-00278558, HAL.
- Cécile Aubert & Patrick Rey & William Kovacic, 2006. "The Impact of Leniency and Whistle-blowing Programs on Cartels," Post-Print hal-00151654, HAL.
- Cécile Aubert, 2005. "The Impact of Leniency and Whistle-blowing Programs on Cartels," Post-Print hal-00278581, HAL.
- Arun S. Malik, 1990. "Avoidance, Screening and Optimum Enforcement," RAND Journal of Economics, The RAND Corporation, vol. 21(3), pages 341-353, Autumn.
- Eric Langlais, 2008.
"Detection Avoidance and Deterrence: Some Paradoxical Arithmetic,"
Journal of Public Economic Theory,
Association for Public Economic Theory, vol. 10(3), pages 371-382, June.
- Langlais, Eric, 2006. "Detection avoidance and deterrence: some paradoxical arithmetics," MPRA Paper 1148, University Library of Munich, Germany, revised 10 Dec 2006.
- Eric Langlais, 2007. "Detection avoidance and deterrence: some paradoxical arithmetics," Working Papers of BETA 2007-06, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
- Keith N. Hylton, 1996. "Optimal Law Enforcement and Victim Precaution," RAND Journal of Economics, The RAND Corporation, vol. 27(1), pages 197-206, Spring.
When requesting a correction, please mention this item's handle: RePEc:hhs:nhheco:2013_004. 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: (Dagny Hanne Kristiansen)
If references are entirely missing, you can add them using this form.