IDEAS home Printed from https://ideas.repec.org/p/knz/dpteco/1204.html

Private antitrust enforcement revisited: The role of private incentives to report evidence to the antitrust authority

Author

Listed:
  • Tim Reuter

    (Department of Economics, University of Konstanz, Germany)

Abstract

It is commonly believed that the possibility to sue privately for antitrust damages decreases the number of type II errors in enforcement at the cost of creating more type I errors. We extend the analysis by taking into account the fact that private parties often submit evidence during public prosecution. Such parties consider private suit as a partial substitute for public prosecution, as both imply desistance of the violation. The trial option might induce these parties to be less willing to contribute evidence to public cases. Private trials crowd out public prosecution and can have ambiguous effects on the number of enforcement errors.

Suggested Citation

  • Tim Reuter, 2012. "Private antitrust enforcement revisited: The role of private incentives to report evidence to the antitrust authority," Working Paper Series of the Department of Economics, University of Konstanz 2012-04, Department of Economics, University of Konstanz.
    • Handle: RePEc:knz:dpteco:1204
    as

    Download full text from publisher

    File URL: http://www.uni-konstanz.de/FuF/wiwi/workingpaperseries/WP_Reuter_4-12.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Bizjak, John M & Coles, Jeffrey L, 1995. "The Effect of Private Antitrust Litigation on the Stock-Market Valuation of the Firm," American Economic Review, American Economic Association, vol. 85(3), pages 436-461, June.
    2. Shavell, Steven, 1997. "The Fundamental Divergence between the Private and the Social Motive to Use the Legal System," The Journal of Legal Studies, University of Chicago Press, vol. 26(2), pages 575-612, June.
    3. 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.
    4. Schinkel, Maarten Pieter & Tuinstra, Jan, 2006. "Imperfect competition law enforcement," International Journal of Industrial Organization, Elsevier, vol. 24(6), pages 1267-1297, November.
    5. Sylvain Bourjade & Patrick Rey & Paul Seabright, 2009. "Private Antitrust Enforcement In The Presence Of Pre‐Trial Bargaining," Journal of Industrial Economics, Wiley Blackwell, vol. 57(3), pages 372-409, September.
    6. Claudio Calcagno, 2012. "Stand-alone private antitrust damages: (how) should competition authorities react?," European Journal of Law and Economics, Springer, vol. 34(2), pages 365-389, October.
    7. Florian Baumann & Tim Friehe, 2010. "Tax Evasion, Investment, and Firm Activity," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 66(1), pages 1-14, March.
    8. Hugh C. Briggs III & Kathleen D. Huryn & Mark E. McBride, 1996. "Treble Damages and the Incentive to Sue and Settle," RAND Journal of Economics, The RAND Corporation, vol. 27(4), pages 770-786, Winter.
    9. Frederik Silbye, 2012. "A note on antitrust damages and leniency programs," European Journal of Law and Economics, Springer, vol. 33(3), pages 691-699, June.
    10. Bosch, Jean-Claude & Eckard, E Woodrow, Jr, 1991. "The Profitability of Price Fixing: Evidence from Stock Market Reaction to Federal Indictments," The Review of Economics and Statistics, MIT Press, vol. 73(2), pages 309-317, May.
    11. Motchenkova, E., 2004. "Effects of Leniency Programs on Cartel Stability," Other publications TiSEM d6321c1e-b79a-4aae-8ef5-d, Tilburg University, School of Economics and Management.
    12. Frezal, Sylvestre, 2006. "On optimal cartel deterrence policies," International Journal of Industrial Organization, Elsevier, vol. 24(6), pages 1231-1240, November.
    13. Tomaso Duso & Damien J. Neven & Lars-Hendrik Röller, 2007. "The Political Economy of European Merger Control: Evidence using Stock Market Data," Journal of Law and Economics, University of Chicago Press, vol. 50(3), pages 455-489.
    14. Sauvagnat, Julien, 2010. "Prosecution and Leniency Programs: a Fool's Game," TSE Working Papers 10-188, Toulouse School of Economics (TSE).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Claudio Calcagno, 2012. "Stand-alone private antitrust damages: (how) should competition authorities react?," European Journal of Law and Economics, Springer, vol. 34(2), pages 365-389, October.
    2. Grajzl, Peter & Baniak, Andrzej, 2018. "Private enforcement, corruption, and antitrust design," Journal of Comparative Economics, Elsevier, vol. 46(1), pages 284-307.
    3. Schinkel, Maarten Pieter & Tuinstra, Jan, 2006. "Imperfect competition law enforcement," International Journal of Industrial Organization, Elsevier, vol. 24(6), pages 1267-1297, November.
    4. Andreea Cosnita-Langlais & Jean-Philippe Tropeano, 2018. "How procedures shape substance: institutional design and antitrust evidentiary standards," European Journal of Law and Economics, Springer, vol. 46(1), pages 143-164, August.
    5. Julien Sauvagnat, 2015. "Prosecution and Leniency Programs: The Role of Bluffing in Opening Investigations," Journal of Industrial Economics, Wiley Blackwell, vol. 63(2), pages 313-338, June.
    6. Günster, Andrea & van Dijk, Mathijs, 2016. "The impact of European antitrust policy: Evidence from the stock market," International Review of Law and Economics, Elsevier, vol. 46(C), pages 20-33.
    7. Luca Aguzzoni & Gregor Langus & Massimo Motta, 2013. "The Effect of EU Antitrust Investigations and Fines on a Firm's Valuation," Journal of Industrial Economics, Wiley Blackwell, vol. 61(2), pages 290-338, June.
    8. Dennis L. Gärtner, 2022. "Corporate Leniency in a Dynamic World: The Preemptive Push of an Uncertain Future," Journal of Industrial Economics, Wiley Blackwell, vol. 70(1), pages 119-146, March.
    9. Garz, Marcel & Maaß, Sabrina, 2021. "Cartels in the European Union, antitrust action, and public attention," Journal of Economic Behavior & Organization, Elsevier, vol. 186(C), pages 533-547.
    10. Fotis, Panagiotis, 2011. "Firm's damages from antitrust & abuse of dominant position investigations," MPRA Paper 32788, University Library of Munich, Germany, revised 13 Aug 2011.
    11. Mark Koyama, 2012. "Prosecution Associations in Industrial Revolution England: Private Providers of Public Goods?," The Journal of Legal Studies, University of Chicago Press, vol. 41(1), pages 95-130.
    12. Christian Langpap, 2007. "Pollution abatement with limited enforcement power and citizen suits," Journal of Regulatory Economics, Springer, vol. 31(1), pages 57-81, February.
    13. David BARTOLINI & Alberto ZAZZARO, 2008. "Are Antitrust Fines Friendly to Competition? An Endogenous Coalition Formation Approach to Collusive Cartels," Working Papers 325, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    14. Katsoulacos, Yannis & Ulph, David, 2014. "Legal Uncertainty, Competition Law Enforcement Procedures and Optimal Penalties," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon TN 2015-12, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    15. Paolo Buccirossi & Lorenzo Ciari & Tomaso Duso & Giancarlo Spagnolo & Cristiana Vitale, 2011. "Measuring The Deterrence Properties Of Competition Policy: The Competition Policy Indexes," Journal of Competition Law and Economics, Oxford University Press, vol. 7(1), pages 165-204.
    16. Flavia Roldán, 2012. "Collusive Networks in Market‐Sharing Agreements in the Presence of an Antitrust Authority," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 21(4), pages 965-987, December.
    17. Boyer, Marcel & Faye, Anne Catherine & Kotchoni, Rachidi, 2017. "Challenges and Pitfalls in Cartel Policy and Fining," TSE Working Papers 17-852, Toulouse School of Economics (TSE).
    18. Bartolini David & Zazzaro Alberto, 2011. "The Impact of Antitrust Fines on the Formation of Collusive Cartels," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-30, September.
    19. Evgenia Motchenkova & Rob Laan, 2011. "Strictness of leniency programs and asymmetric punishment effect," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 58(4), pages 401-431, December.
    20. Flore, Christian & Kolaric, Sascha & Schiereck, Dirk, 2017. "Settlement agreement types of federal corporate prosecution in the U.S. and their impact on shareholder wealth," Journal of Business Research, Elsevier, vol. 76(C), pages 145-158.

    More about this item

    Keywords

    ;
    ;
    ;

    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:knz:dpteco:1204. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Office Ursprung The email address of this maintainer does not seem to be valid anymore. Please ask Office Ursprung to update the entry or send us the correct address (email available below). General contact details of provider: https://edirc.repec.org/data/fwkonde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.