« Barzuza on Antitakeover Law | Main | Listokin and Taibleson on Credit Rating Agencies »
January 17, 2010
Stucke on Antitrust Law
has posted Am I a Price-Fixer? A Behavioral Economics Analysis of Cartels on SSRN with the following abstract:
This
article considers why executives risk prison, their careers, and their
status in the community, and violate the antitrust laws. The generally
accepted approach today is that price-fixers behave as “rational”
profit-maximizers. Executives engage in a cost-benefit analysis to see
if the benefits from the crime are worth taking the risks. To achieve
optimal deterrence, the economic theory goes, the antitrust penalty
should equal the violation’s expected net harm to others (plus
enforcement costs) divided by the probability of detection and proof of
the violation. Despite increasing antitrust fines and jail sentences,
cartels continue to exist. Before the United States responds with
greater fines and jail sentences, it makes sense to evaluate several
assumptions underlying optimal deterrence theory. In reviewing the
behavioral economics literature, policymakers will have a better grasp
of the situational and dispositional factors that promote price-fixing.
ECC
January 17, 2010 | Permalink
