Journal article

Publication year: 2018

Pages: 448-475

Journal: Journal of Institutional and Theoretical Economics

Volume number: 174

Issue number: 3

ISSN: 0932-4569

eISSN: 1614-0559

DOI Link: https://doi.org/10.1628/093245617X14996661407776

Publisher: Mohr Siebeck

Abstract: 
This article models antitrust compliance training as a form of information acquisition. It finds that lower fines may benefit consumers by improving the deterrence of cartels: Sales managers who underestimate the severity of antitrust enforcement sometimes establish cartels that are actually unprofitable for their firms. This risk rises if an antitrust authority lowers the sanctions imposed on anticompetitive conduct. Therefore, it is a best response for firms' compliance officers to establish antitrust training programs to mitigate this risk and prevent cartels. Fines must however not be reduced so strongly as to make anticompetitive collusion profitable.

Harvard Citation style: Paha, J. (2018) Cartel Conduct and Antitrust Compliance with Imperfect Information about Enforcement Risk, Journal of Institutional and Theoretical Economics, 174(3), pp. 448-475. https://doi.org/10.1628/093245617X14996661407776

APA Citation style: Paha, J. (2018). Cartel Conduct and Antitrust Compliance with Imperfect Information about Enforcement Risk. Journal of Institutional and Theoretical Economics. 174(3), 448-475. https://doi.org/10.1628/093245617X14996661407776