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 how- ever hard to get empirical support for this rather intuitive relationship. This paper offers a model that can contribute 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, the model shows that competition authorities who attempt to fight cartels by means of tougher sanctions for all offenders may actually lead cartels to increase their overcharge when leniency programs are in place.
|Date of creation:||06 Mar 2013|
|Contact details of provider:|| Postal: University of Stavanger, NO-4036 Stavanger, Norway|
Web page: http://www.uis.no/research/economics_and_finance
More information through EDIRC
References listed on IDEAS
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.:
- Eric Langlais, 2007.
"Detection avoidance and deterrence: some paradoxical arithmetics,"
Working Papers of BETA
2007-06, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
- 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, 06.
- Langlais, Eric, 2006. "Detection avoidance and deterrence: some paradoxical arithmetics," MPRA Paper 1148, University Library of Munich, Germany, revised 10 Dec 2006.
- 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," Economic Journal, 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.
- Vasiliki Bageri & Yannis Katsoulacos & Giancarlo Spagnolo, 2013. "The distortive effects of antitrust fines based on revenue," Working Papers 153, Bank of Greece.
- Arun S. Malik, 1990. "Avoidance, Screening and Optimum Enforcement," RAND Journal of Economics, The RAND Corporation, vol. 21(3), pages 341-353, Autumn.
- Gary S. Becker, 1968.
"Crime and Punishment: An Economic Approach,"
Journal of Political Economy,
University of Chicago Press, vol. 76, pages 169-169.
- Cécile Aubert, 2005.
"The Impact of Leniency and Whistle-blowing Programs on Cartels,"
- 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 & 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.
- George J. Stigler, 1974.
"The Optimum Enforcement of Laws,"
in: Essays in the Economics of Crime and Punishment, pages 55-67
National Bureau of Economic Research, Inc.
- Joseph E. Harrington, 2008. "OPTIMAL CORPORATE LENIENCY PROGRAMS -super-," Journal of Industrial Economics, Wiley Blackwell, vol. 56(2), pages 215-246, 06.
- Keith N. Hylton, 1996. "Optimal Law Enforcement and Victim Precaution," RAND Journal of Economics, The RAND Corporation, vol. 27(1), pages 197-206, Spring.
- Mohamed Jellal & Saïd Souam, 2004. "Delegation, Incentives and Antitrust Enforcement," Working Papers 2004-41, Centre de Recherche en Economie et Statistique.
- 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.
When requesting a correction, please mention this item's handle: RePEc:hhs:stavef:2013_002. 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: (Bernt Arne Odegaard)
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.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.