Nationalistic Bias in Collusion Prosecution: The Case for International Antitrust Agreements

52 Pages Posted: 1 Apr 2017 Last revised: 21 Jun 2021

See all articles by Filomena Garcia

Filomena Garcia

Indiana University; ISEG - Technical University of Lisbon; UECE - Research Unit in Economics and Complexity

Jose Manuel Paz y Miño

Universidad Catolica del Uruguay

Gustavo Torrens

Indiana university

Date Written: December 1, 2018

Abstract

We study the incentives of competition authorities to prosecute collusive practices of domestic and foreign firms in a multi-market contact model between two firms operating in two countries. In equilibrium, the country of origin of the firms might prefer to delay prosecution to protect pro ts in foreign markets. This strategic delay is valuable because prosecution in the country of origin of the firms activates an information spillover that triggers prosecution in the foreign country. Prosecution delays, however, are not optimal from the point of view of global welfare, something that could be solved by integrating the competition authorities. With multiple industries, both countries can be better off under integration or signing an international antitrust agreement.

Keywords: Multi-Market Collusion, Antitrust Policy, Strategic Prosecution, International Antitrust Agreements

JEL Classification: F23, F53, L41, K21

Suggested Citation

Garcia, Filomena and Paz y Miño, Jose Manuel and Torrens, Gustavo, Nationalistic Bias in Collusion Prosecution: The Case for International Antitrust Agreements (December 1, 2018). Available at SSRN: https://ssrn.com/abstract=2943073 or http://dx.doi.org/10.2139/ssrn.2943073

Filomena Garcia

Indiana University ( email )

Wylie Hall
Bloomington, IN 47405-6620
United States

ISEG - Technical University of Lisbon ( email )

R. Miguel Lupi, 20
Lisbon, 1200
Portugal

UECE - Research Unit in Economics and Complexity ( email )

Rua Miguel Lupi, 20
Lisboa, 1200-781
Portugal

Jose Manuel Paz y Miño

Universidad Catolica del Uruguay ( email )

Av. 8 de Octubre 2738
Montevideo, CP 11600
Uruguay

Gustavo Torrens (Contact Author)

Indiana university ( email )

Wylie Hall, 100 S Woodland Ave
Bloomington, IN 47405-7104
United States
8128568131 (Phone)
47405-7104 (Fax)

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