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Collusion, Managerial incentives and antitrust fines

Author

Listed:
  • Florence THEPOT

    (School of Law, University of Glasgow)

  • Jacques THEPOT

    (LARGE Research Center, Université de Strasbourg)

Abstract

Based on a duopoly price competition model, this paper argues that collusion on managerial incentive compensations may have the equivalent effects to collusion on prices. This paper also provides an analysis of the effect of different antitrust fines regimes in the context of a game between two companies each composed of two-level of decision making (the board of directors and the sales manager). The contribution of this paper is two-fold: it identifies" backstage arrangements" that may be used by companies in order to achieve monopoly pricing outcome without entering into explicit price-fixing practices. It also highlights the inefficiency of fining regimes based on sales when companies have a multi-layer decision-making structure

Suggested Citation

  • Florence THEPOT & Jacques THEPOT, 2017. "Collusion, Managerial incentives and antitrust fines," Working Papers of LaRGE Research Center 2017-06, Laboratoire de Recherche en Gestion et Economie (LaRGE), Université de Strasbourg.
    • Handle: RePEc:lar:wpaper:2017-06
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    References listed on IDEAS

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    More about this item

    Keywords

    duopoly; antitrust law; governance. JEL classification : K21; L13; L41.;
    All these keywords.

    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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