An Economic Approach to Price Fixing
96 Pages Posted: 27 Jun 2011 Last revised: 8 Jan 2015
Date Written: May 1, 2011
This article examines optimal policy toward coordinated oligopolistic price elevation. First, it analyzes the social welfare implications of enforcement, elaborating the value of deterrence and the nature of possible chilling effects. Then, it explores a variety of means of detection, with particular attention to the sorts of errors that may arise under each. Finally, it examines the level and type of sanctions that should be employed. It emerges that there is remarkably little overlap in content between the present investigation and prior legal policy work on the subject. Some central issues have been ignored while particular resolutions of others have been taken for granted, thereby indicating the need for wholesale reassessment.
JEL Classification: D43, K21, L13, L41
Suggested Citation: Suggested Citation