We study the optimal design of liability schemes (at the corporate or individual level) when the objective is to deter socially harmful corporate behavior without discouraging productivity enhancements. We assume that firms face agency problems between shareholders and managers (moral hazard)...

This paper tests whether the transition from the old Economic Competition Act, which was based on the so-called “abuse system”, to the new Competition Act, which was based on “prohibition system”, in the Netherlands had an impact on the price-cost margins in manufacturing industries...

The main feature of the penalty schemes described in current sentencing guidelines is that the fine is based on the accumulated gains from cartel or price-fixing activities for the firm.These gains are usually difficult to estimate, but they can be approximated by a fraction of the turnover.The...

This paper studies the effects of leniency programs on the behavior of firms participating in illegal cartel agreements.The main contribution of the paper is that we consider asymmetric firms.In general, firms differ in size and operate in several different markets.In our model, they form a...

It is well established that an incumbent firm may use exclusivity contracts so as to monopolize an industry or deter entry. Such an anticompetitive practice could be tolerated if it were associated with sufficiently large efficiency gains, e.g. insuring buyers against price volatility. In this...

Abstract: We analyse a newspaper market where two editors first choose the political position of their newspaper, then set cover prices and advertising tariffs. We build on the work of Gabszewicz, Laussel and Sonnac (2001, 2002), whose model of competition among newspaper publishers we take as...

Theoretical IO models of horizontal mergers and acquisitions make the critical assumption of efficiency gains.Without efficiency gains, these models predict either that mergers are not profitable or that mergers are welfare reducing.A problem here is the empirical observation that on average...

Many commodities are traded on both a spot market and a derivative market. We show that an incumbent producer may use financial derivatives to extract rent from a potential entrant. The incumbent can indeed sell insurance to a large buyer to commit himself to compete aggressively in the spot...

We analyze a differential game describing the interactions between a firm that might be violating competition law and the antitrust authority.The objective of the authority is to minimize social costs (loss in consumer surplus) induced by an increase in prices above marginal costs.It turns out...

The present study examines the impact of several industry characteristics on the propensity to collude using a dataset on the existence of collusion across Dutch industries during the late 1990s and early 2000s. The results of the Probit model with sample selection indicate that our sample of...