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Effects of Hostility Tradition in Antitrust: Leniency Programs and Cooperation Agreements

27 Pages Posted: 18 Apr 2014  

Natalia Pavlova

National Research University Higher School of Economics; Russian Presidential Academy of National Economy and Public Administration (RANEPA); Moscow State University

Andrey E Shastitko

Lomonossov Moscow State University; Russian Presidential Academy of National Economy and Public Administration (RANEPA)

Date Written: April 17, 2014

Abstract

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

Pavlova, Natalia and Shastitko, Andrey E, Effects of Hostility Tradition in Antitrust: Leniency Programs and Cooperation Agreements (April 17, 2014). Higher School of Economics Research Paper No. WP BRP 58/EC/2014. Available at SSRN: https://ssrn.com/abstract=2426143 or http://dx.doi.org/10.2139/ssrn.2426143

Natalia Pavlova (Contact Author)

National Research University Higher School of Economics ( email )

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

Russian Presidential Academy of National Economy and Public Administration (RANEPA) ( email )

Moscow
Russia

Moscow State University ( email )

GSP-2, Leninskie Gory
Moscow, 119992
Russia

Andrey E Shastitko

Lomonossov Moscow State University ( email )

1-46 Leninskiye Gory
Moscow, 119991
Russia

Russian Presidential Academy of National Economy and Public Administration (RANEPA) ( email )

Vernadskogo Prospect 82
Moscow, Moscow 119571
Russia

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