The Competition between Competition Rules

36 Pages Posted: 20 Mar 2000 Last revised: 8 May 2000

See all articles by Hans-Werner Sinn

Hans-Werner Sinn

CESifo (Center for Economic Studies and Ifo Institute); National Bureau of Economic Research (NBER); Ludwig Maximilian University of Munich

Multiple version iconThere are 2 versions of this paper

Date Written: July 1999

Abstract

Open borders imply systems competition. This paper studies the implications of systems competition for the national competition rules. It is shown that an equilibrium where all countries retain their antitrust laws does not exist, since abolishing this law makes it possible for a single country to establish a cartel that successfully appropriates foreign business profits. Instead of such an equilibrium, a deregulation race is likely to emerge in which all but the last country repeal their antitrust laws. The deregulation race results in a chain of Stackelberg leadership positions taken over by national cartels that renders lower profits and higher consumer rents than would have been the case with harmonization of the antitrust laws.

Suggested Citation

Sinn, Hans-Werner, The Competition between Competition Rules (July 1999). NBER Working Paper No. w7273. Available at SSRN: https://ssrn.com/abstract=199296

Hans-Werner Sinn (Contact Author)

CESifo (Center for Economic Studies and Ifo Institute) ( email )

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Ludwig Maximilian University of Munich

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