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Private Antitrust Enforcement in the Presence of Pre-Trial Bargaining

38 Pages Posted: 13 Oct 2009  

Sylvain Bourjade

École Supérieure de Commerce (ESC) de Toulouse

Patrick Rey

Toulouse School of Economics; Centre for Economic Policy Research (CEPR)

Paul Seabright

University of Toulouse I - Industrial Economic Institute (IDEI); Centre for Economic Policy Research (CEPR)

Abstract

We study the effect of encouraging private actions for breaches of competition law. We develop a model of litigation and settlement with asymmetric information. We show that screening liable from non-liable defendants requires the Court to restrict the rules governing admissible evidence. We study how to design the rules so as to enhance the role of private litigation in antitrust enforcement and prove that increasing damages is better than reducing costs of initiating suits. We also find large benefits from introducing a system of compensation for defendants found non-liable, paid by unsuccessful plaintiffs.

Suggested Citation

Bourjade, Sylvain and Rey, Patrick and Seabright, Paul, Private Antitrust Enforcement in the Presence of Pre-Trial Bargaining. The Journal of Industrial Economics, Vol. 57, Issue 3, pp. 372-409, September 2009. Available at SSRN: https://ssrn.com/abstract=1486862 or http://dx.doi.org/10.1111/j.1467-6451.2009.00383.x

Sylvain Bourjade (Contact Author)

École Supérieure de Commerce (ESC) de Toulouse ( email )

20, bd Lascrosses - BP 7010
Toulouse Cedex 7, 31068
France

Patrick Rey

Toulouse School of Economics ( email )

2 Rue du Doyen-Gabriel-Marty
Toulouse, 31042
France

Centre for Economic Policy Research (CEPR)

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

Paul Seabright

University of Toulouse I - Industrial Economic Institute (IDEI) ( email )

Manufacture des Tabacs
21 Allee de Brienne bat. F
Toulouse Cedex, F-31000
France
+33 5 61 12 86 17 (Phone)
+33 5 61 12 86 37 (Fax)

Centre for Economic Policy Research (CEPR)

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

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