On Optimizing the Deterrence of Cartels

Posted by D. Daniel Sokol

Ke Li (American Antitrust Institute) has posted On Optimizing the Deterrence of Cartels.

ABSTRACT: While World Competition Day (December 5) went unnoticed this year in the United States, the need to increase the current level of cartel sanctions should not be downplayed. Empirical evidence shows that cartelization raises price and overcharges consumers billions of dollars in the United States alone, but the combined sanctions from both criminal prosecutions and private suits have failed miserably to achieve the optimal deterrence. This paper describes some of the harmful effects caused by cartels and outlines five important recommendations made by Professors John Connor and Robert Lande in raising the existing level of sanctions so that they are more nearly optimal.