International Antitrust Enforcement and Multimarket Contact

Posted: 23 May 2012  

Jay Pil Choi

Michigan State University - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Heiko A. Gerlach

University of Queensland - School of Economics

Date Written: May 2012

Abstract

This article analyzes cartel formation and international antitrust enforcement when multinational firms operate in several jurisdictions with local antitrust authorities. We are concerned with how the sustainability of collusion in one local market is affected by the existence of collusion in other markets when they are linked by a negative demand relationship. The interdependence of cartel stability across markets leads to potential externalities in antitrust enforcement across jurisdictions. Local antitrust enforcement equilibrium enforcement may exhibit a nonmonotonicity in the degree of market integration. We compare it with globally optimal antitrust enforcement policy and discuss the role of international antitrust coordination.

Suggested Citation

Choi, Jay Pil and Gerlach, Heiko A., International Antitrust Enforcement and Multimarket Contact (May 2012). International Economic Review, Vol. 53, Issue 2, pp. 635-658, 2012. Available at SSRN: https://ssrn.com/abstract=2065136 or http://dx.doi.org/10.1111/j.1468-2354.2012.00695.x

Jay Pil Choi (Contact Author)

Michigan State University - Department of Economics ( email )

101 Marshall Hall
East Lansing, MI 48824
United States
517-353-7281 (Phone)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

Heiko A. Gerlach

University of Queensland - School of Economics ( email )

Brisbane, QLD 4072
Australia

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