Effects of Hostility Tradition in Antitrust: Leniency Programs and Cooperation Agreements
27 Pages Posted: 18 Apr 2014
Date Written: April 17, 2014
The article focuses on the effects that type I errors can have on the incentives of firms to compete, collude or engage in efficiency promoting socially beneficial cooperation. Our results confirm that in the presence of type I errors the introduction of a leniency program can have ambiguous effects, including the destruction and prevention of welfare enhancing horizontal cooperation agreements. The obtained results help understand the negative impact the hostility tradition resulting in type I enforcement errors can have on social welfare when applied to the regulation of horizontal agreements.
Keywords: antitrust, competition, collusion, cooperation agreements, leniency, enforcement errors
JEL Classification: D43, K21, L41
Suggested Citation: Suggested Citation