Competition and Misconduct

55 Pages Posted: 9 Nov 2021

See all articles by John E. Thanassoulis

John E. Thanassoulis

University of Warwick - Warwick Business School; UK Competition and Markets Authority; Oxford-Man Institute, University of Oxford

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Date Written: October 2021


Misconduct is widespread; practices such as mis-selling, pump&dump, and money laundering harm counterparties while raising profits. This paper presents a mechanism which can determine what sorts of misconduct can be sustained in competitive equilibrium in concentrated markets, oligopoly settings, and in markets with many small competing firms. The model studied allows general demand and makes a distinction in types of ethical dilemma using current psychological understanding. The paper shows, for example, that markets with many small competing firms are not vulnerable to misconduct if firms respond to entry with niche strategies or if the ethical dilemma draws an emotional response.

Suggested Citation

Thanassoulis, John E., Competition and Misconduct (October 2021). CEPR Discussion Paper No. DP16678, Available at SSRN:

John E. Thanassoulis (Contact Author)

University of Warwick - Warwick Business School ( email )

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UK Competition and Markets Authority ( email )

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Oxford-Man Institute, University of Oxford ( email )

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