Friday, January 30, 2009
Posted by D. Daniel Sokol
Joe Harrington (Johns Hopkins - Economics) asks When Does a Self-Serving Antitrust Authority Act in Society's Best Interests?
ABSTRACT: If an antitrust authority chooses policies to maximize the number of successfully prosecuted cartels, when do those policies also serve to minimize the number of cartels that form? When the detection and prosecution of cartels is inherently difficult, we find that an antitrust authority's policies minimize the number of cartels, as is socially desirable. But when the detection and prosecution of cartels is not difficult, an antitrust authority is not aggressive enough in that it prosecutes too few cartel cases.