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Regime Shift in Antitrust

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  • Ghosal, Vivek

Abstract

This paper empirically models the longer-run deep-seated shift in intellectual thinking that followed the Chicago School’s criticism of the older antitrust doctrine, the shorter-run driving forces related to switches of the political party in power, merger waves, changes in economic activity and the level of funding and quantifies their impact on enforcement by the Antitrust Division of the U.S. Department of Justice over the period 1958-2002. The key findings are: (1) a distinct regime-shift in antitrust enforcement during the 1970s and, post-regime-shift, there has been a marked compositional change with a quantitatively large increase (decrease) in criminal (civil) antitrust court cases initiated; (2) post-regime-shift, there appears to be a change in the role played by politics with Republicans initiating more (less) criminal (civil) court cases than Democrats and the estimated quantitative effects are large; (3) disaggregating the total number of court cases into the main categories under which they are initiated (price-fixing, mergers, monopolization and restraints-of-trade) shows that individual types of cases have widely differing responses to changes in the driving forces; and (4) in a horse-race between the regime-shift and political effect on one side and the remaining variables on the other, the former forces win hands-down in explaining broad shifts in enforcement. Modeling the longer-run shift and disaggregating the court cases emerge as crucial to gaining insights into the intertemporal shifts in enforcement. The paper elaborates on the causes for the shift in enforcement and on the effectiveness of antitrust.

Suggested Citation

  • Ghosal, Vivek, 2007. "Regime Shift in Antitrust," MPRA Paper 5460, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:5460
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    File URL: https://mpra.ub.uni-muenchen.de/5460/1/MPRA_paper_5460.pdf
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    References listed on IDEAS

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    Cited by:

    1. Alessandro Marra & Alessandro Sarra, 2010. "Incomplete antitrust laws and private actions for damages," European Journal of Law and Economics, Springer, vol. 30(2), pages 111-135, October.
    2. Ajay Bhaskarabhatla & Enrico Pennings, 2012. "Defensive Disclosure under Antitrust Enforcement," Tinbergen Institute Discussion Papers 12-010/2, Tinbergen Institute.
    3. Ghosal, Vivek, 2006. "Discovering Cartels: Dynamic Interrelationships between Civil and Criminal Antitrust Investigations," MPRA Paper 5499, University Library of Munich, Germany.
    4. Ghosal Vivek, 2011. "The Law and Economics of Enhancing Cartel Enforcement: Using Information From Non-Cartel Investigations to Prosecute Cartels," Review of Law & Economics, De Gruyter, vol. 7(2), pages 501-538, December.
    5. Vivek Ghosal & D. Daniel Sokol, 2016. "Policy Innovations, Political Preferences, and Cartel Prosecutions," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 48(4), pages 405-432, June.
    6. Jeroen Hinloopen & Adriaan Soetevent, 2006. "Trust and Recidivism; the Partial Success of Corporate Leniency Program in the Laboratory," Tinbergen Institute Discussion Papers 06-067/1, Tinbergen Institute.

    More about this item

    Keywords

    Antitrust enforcement; regime-shift; politics; supreme court; effectiveness;

    JEL classification:

    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
    • B00 - Schools of Economic Thought and Methodology - - General - - - History of Economic Thought, Methodology, and Heterodox Approaches
    • K00 - Law and Economics - - General - - - General (including Data Sources and Description)
    • M20 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - General

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