Quantifying the deterrent effect of anticartel enforcement

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Abstract

This paper presents a rare attempt to quantify the deterrent effect of anti-cartel policy. It develops a conceptual framework, which establishes the sort of information necessary for such quantification. This is then illustrated and calibrated by drawing upon existing literatures and using evidence from legal cartels to approximate what would be observed absent policy. Measuring impact by the proportion of all potential harm that is deterred, our best estimate is two thirds and, even on conservative assumptions, at least half of all harms (or seven times the detected harm) is deterred.
Original languageEnglish
Pages (from-to)1933-1949
JournalEconomic Inquiry
Volume56
Issue number4
Early online date30 Mar 2018
DOIs
Publication statusPublished - Oct 2018

Keywords

  • anti-competitive harm
  • cartels
  • detection
  • deterrence
  • Monte Carlo stimulation
  • selection bias

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