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When Does a Self-Serving Antitrust Authority Act in Society's Best Interests?

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  • Joseph E. Harrington, Jr.

Abstract

If an antitrust authority chooses policies to maximize the number of successfully prosecuted cartels, when do those policies also serve to minimize the number of cartels that form? When the detection and prosecution of cartels is inherently difficult, we find that an antitrust authority¡¯s policies minimize the number of cartels, as is socially desirable. But when the detection and prosecution of cartels is not difficult, an antitrust authority is not aggressive enough in that it prosecutes too few cartel cases.

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  • Joseph E. Harrington, Jr., 2009. "When Does a Self-Serving Antitrust Authority Act in Society's Best Interests?," Economics Working Paper Archive 549, The Johns Hopkins University,Department of Economics.
    • Handle: RePEc:jhu:papers:549
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    References listed on IDEAS

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    1. Joseph E. Harrington, Jr, 2005. "Optimal Corporate Leniency Programs," Economics Working Paper Archive 527, The Johns Hopkins University,Department of Economics.
    2. Motta, Massimo & Polo, Michele, 2003. "Leniency programs and cartel prosecution," International Journal of Industrial Organization, Elsevier, vol. 21(3), pages 347-379, March.
    3. Besanko, David & Spulber, Daniel F, 1989. "Antitrust Enforcement under Asymmetric Information," Economic Journal, Royal Economic Society, vol. 99(396), pages 408-425, June.
    4. Joseph E. Harrington & Myong-Hun Chang, 2009. "Modeling the Birth and Death of Cartels with an Application to Evaluating Competition Policy," Journal of the European Economic Association, MIT Press, vol. 7(6), pages 1400-1435, December.
    5. Joseph E. Harrington, Jr, 2006. "Modelling the Birth and Death of Cartels with an Application to Evaluating Antitrust Policy," Economics Working Paper Archive 532, The Johns Hopkins University,Department of Economics.
    6. Myong-Hun Chang & Joseph E. Harrington, Jr., 2008. "The Impact of a Corporate Leniency Program on Antitrust Enforcement and Cartelization," Economics Working Paper Archive 548, The Johns Hopkins University,Department of Economics.
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