Discussion Paper Details

Please find the details for DP9518 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: The Distortive Effects of Antitrust Fines Based on Revenue

Author(s): Vasiliki Bageri, Yannis Katsoulacos and Giancarlo Spagnolo

Publication Date: June 2013

Keyword(s): Antitrust, Deterrence, Fines and Law Enforcement

Programme Area(s): Industrial Organization

Abstract: In most jurisdictions, antitrust fines are based on affected commerce rather than on collusive profits, and in some others, caps on fines are introduced based on total firm sales rather than on affected commerce. We uncover a number of distortions that these policies generate, propose simple models to characterise their comparative static properties, and quantify them with simulations based on market data. We conclude by discussing the obvious need to depart from these distortive rules-of-thumb that appear to have the potential to substantially reduce social welfare.

For full details and related downloads, please visit:

Bibliographic Reference

Bageri, V, Katsoulacos, Y and Spagnolo, G. 2013. 'The Distortive Effects of Antitrust Fines Based on Revenue'. London, Centre for Economic Policy Research.