ZEW Conference on Economic Methods in Competition Law Enforcement , 2011-06-24

Title : ( Antitrust Auditing without Commitment )

Authors: Mehdi Feizi ,

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In this paper, we analyze a game between firms and an antitrust authority that has imperfect knowledge about production cost and no commitment to its auditing policy. We …find that for a relatively heavy weight of consumer surplus in the antitrust authority’s objective, the game has a unique equilibrium using mixed strategies in which only low-cost firms collude. Moreover, not only the severity of the fine has a deterring expect, but in the presence of substantial under-deterrence, it is also a complement to the probability of auditing. Finally, we demonstrate that for sufficiently low prior beliefs about the realization of low-cost firms, the antitrust authority would be better o¤, ex post, if it took only the consumer surplus into consideration.

Keywords

, Antitrust Policy, Cartel, Competition
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@inproceedings{paperid:1039895,
author = {Feizi, Mehdi},
title = {Antitrust Auditing without Commitment},
booktitle = {ZEW Conference on Economic Methods in Competition Law Enforcement},
year = {2011},
location = {Mannheim, GERMANY},
keywords = {Antitrust Policy; Cartel; Competition Policy},
}

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%0 Conference Proceedings
%T Antitrust Auditing without Commitment
%A Feizi, Mehdi
%J ZEW Conference on Economic Methods in Competition Law Enforcement
%D 2011

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