Wednesday, April 10, 2013
Posted by D. Daniel Sokol
Rosa M. Abrantes-Metz, Global Economics Group, LLC; New York University - Leonard N. Stern School of Business - Department of Economics and D. Daniel Sokol, University of Florida - Levin College of Law; University of Minnesota School of Law have posted Antitrust Corporate Governance and Compliance.
ABSTRACT: Cartel detection has been an important part of antitrust scholarship and policy for some time. Most of the development of the literature on cartel detection has focused at the firm level. This should not be surprising since industrial organization studies firms and markets. Antitrust scholarship has not focused as much on compliance and corporate governance within a given firm. Understanding the internal workings of firms would allow for closer to optimal deterrence, as this understanding would allow for calibrating policy around the incentives within a given firm, its subunits and individuals who work therein, to comply with antitrust law.
Both theoretical and empirical work in a number of different fields, including economics, accounting, finance, organizational theory and sociology provide important insights indicating that a firm is not merely a single entity in its actions. Rather, a firm is made up of a number of various components, each of which has its own incentives that shape firm behavior. This chapter reviews both the antitrust and the non-antitrust literatures on compliance and corporate governance to provide a clearer picture of the extant literature and the theoretical and empirical gaps within the antitrust literature to better inform antitrust policy on detecting cartels. This chapter explores the scholarship both within and outside of antitrust to better understand internal detection of wrongdoing and improved compliance in the antitrust cartel context.