Preventing Innovative Cooperations: The Legal Exemptions Unintended Side Effect
In 2004, European competition law had been faced with considerable changes due to the introduction of the new Council Regulation No. 1/2003. One of the major renewals was the replacement of the centralized notification system for inter-company cooperations in favor of a so-called legal exemption system. We analyze the implications of this reform on the agreements firms implement. In contrast to previous research we focus on the reform’s impact on especially welfare enhancing, namely innovative agreements. We show that the law’s intention to reduce the incentive to establish illegal cartels will be reached. However, by the same mechanism, also highly innovative cooperations might be prevented. To avoid this unintended effect, we conclude that only fines but not the monitoring activities should be increased in order to deter illegal but not innovative agreements.
|Date of creation:||Jun 2008|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (0345) 7753-60
Fax: (0345) 7753-820
Web page: http://www.iwh-halle.de
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.:
- A. Mitchell Polinsky & Steven Shavell, 1999.
"The Economic Theory of Public Enforcement of Law,"
NBER Working Papers
6993, National Bureau of Economic Research, Inc.
- Gary S. Becker, 1974.
"Crime and Punishment: An Economic Approach,"
in: Essays in the Economics of Crime and Punishment, pages 1-54
National Bureau of Economic Research, Inc.
- Frédéric Loss & Estelle Malavolti-Grimal & Thibaud Vergé & Fabian Bergès-Sennou, 2005.
"European Competition Policy Modernization : From Notifications to Legal Exception,"
2005-38, Centre de Recherche en Economie et Statistique.
- Loss, Frederic & Malavolti-Grimal, Estelle & Verge, Thibaud & Berges-Sennou, Fabian, 2008. "European competition policy modernization: From notifications to legal exception," European Economic Review, Elsevier, vol. 52(1), pages 77-98, January.
- Frederic Loss & Estelle Malavolti-Grimal & Thibaud VergÃ© & Fabian Berges, 2008. "European competition policy modernization: from notification to legal exception," Working Papers 22644, Institut National de la Recherche Agronomique, France.
- Frédéric Loss & Estelle Malavolti & Thibaud Vergé & Fabian Bergès-Sennou, 2008. "European competition policy modernization : from notifications to legal exception," Post-Print hal-01021575, HAL.
- Polinsky, A. Mitchell, 2006.
"Optimal fines and auditing when wealth is costly to observe,"
International Review of Law and Economics,
Elsevier, vol. 26(3), pages 323-335, September.
- A. Mitchell Polinsky, 2004. "Optimal Fines and Auditing When Wealth is Costly to Observe," Discussion Papers 03-038, Stanford Institute for Economic Policy Research.
- A. Mitchell Polinsky, 2004. "Optimal Fines and Auditing When Wealth is Costly to Observe," NBER Working Papers 10760, National Bureau of Economic Research, Inc.
- Polinsky, Mitchell & Shavell, Steven, 1979. "The Optimal Tradeoff between the Probability and Magnitude of Fines," American Economic Review, American Economic Association, vol. 69(5), pages 880-91, December.
- Shavell, Steven, 1993. "The Optimal Structure of Law Enforcement," Journal of Law and Economics, University of Chicago Press, vol. 36(1), pages 255-87, April.
- Ulrich Blum & Nicole Steinat & Michael Veltins, 2008. "On the rationale of leniency programs: a game-theoretical analysis," European Journal of Law and Economics, Springer, vol. 25(3), pages 209-229, June.
- Barros, Pedro Pita, 2003. "Looking behind the curtain--effects from modernization of European Union competition policy," European Economic Review, Elsevier, vol. 47(4), pages 613-624, August.
- Garoupa, Nuno, 1997. " The Theory of Optimal Law Enforcement," Journal of Economic Surveys, Wiley Blackwell, vol. 11(3), pages 267-95, September.
- Buccirossi, Paolo & Spagnolo, Giancarlo, 2006. "Optimal Fines in the Era of Whistleblowers," CEPR Discussion Papers 5465, C.E.P.R. Discussion Papers.
- Neven, Damien J. & Roller, Lars-Hendrik, 1991.
"European integration and trade flows,"
European Economic Review,
Elsevier, vol. 35(6), pages 1295-1309, August.
When requesting a correction, please mention this item's handle: RePEc:iwh:dispap:6-08. 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: (Hubert Gabrisch)
If references are entirely missing, you can add them using this form.