Fighting cartels: some economics of council regulation (EC) 1/2003
This paper investigates the effectiveness of the new Council Regulation (EC) 1/2003 which replaces the mandatory notification and authorization system by a legal exception system. Effectiveness is operationalized via the two subcriteria compliance to Art. 81 EC Treaty and the probabilities of type I and type II errors committed by the European Commission. We identify four different types of Perfect Bayesian Nash Equilibria: fullcompliance, zero-compliance, positive-compliance and full-deterrence. We show that the Commission can, in principle, hit the full-compliance equilibrium, where the cartelizing firms fully obey the requirements of Art 81(3) EC Treaty and both error probabilities are zero.
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- Frédéric Loss & Estelle Malavolti & Thibaud Vergé & Fabian Bergès-Sennou, 2008.
"European competition policy modernization : from notifications to legal exception,"
- 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.
- Frédéric Loss & Estelle Malavolti-Grimal & Thibaud Vergé & Fabian Bergès-Sennou, 2005. "European Competition Policy Modernization : From Notifications to Legal Exception," Working Papers 2005-38, Centre de Recherche en Economie et Statistique.
- Schinkel, M.P. & Tuinstra, J., 2004.
"Imperfect Competition Law Enforcement,"
CeNDEF Working Papers
04-07, Universiteit van Amsterdam, Center for Nonlinear Dynamics in Economics and Finance.
- Verena Hahn, 2000. "Antitrust Enforcement: Abuse Control or Notification?," European Journal of Law and Economics, Springer, vol. 10(1), pages 69-91, July.
- Steven Shavell, 2006. "The Appeals Process and Adjudicator Incentives," The Journal of Legal Studies, University of Chicago Press, vol. 35(1), pages 1-29, 01.
- 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.
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