Monday, December 3, 2018
Madhuparna Ganguly (Indira Gandhi Institute of Development Research) and Rupayan Pal (Indira Gandhi Institute of Development Research) offer Signaling through public antitrust enforcement: A Generalization.
ABSTRACT: This note shows that the argument of Saljanin(2017) [Saljanin, 2017. "Signaling through public antitrust enforcement" , Economics Letters 169, 4 - 6] that public antitrust enforcement complements private investment is robust to allowing public investment in antitrust enforcement to be productive. However, unlike as in the case of unproductive public investment, over investment in public antitrust enforcement does not necessarily signal that the government is pro-competition: in pooling equilibria either only the anti-competition government or both types of government over invests, whereas in the separating equilibrium only the pro-competition government over invests.