The Distortive Effects of Antitrust Fines Based on Revenue

26 Pages Posted: 11 Aug 2022

See all articles by Yannis Katsoulacos

Yannis Katsoulacos

Athens University of Economics and Business

Vasiliki Bageri

Athens University of Economics and Business

Giancarlo Spagnolo

Stockholm School of Economics (SITE); Centre for Economic Policy Research (CEPR); University of Rome 'Tor Vergata'; EIEF

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Date Written: February 1, 2013

Abstract

In most jurisdictions, antitrust fines are based on affected commerce rather than on collusive profits, and in some others, caps on fines are introduced based on total firm sales rather than on affected commerce. We uncover a number of distortions that these policies generate, propose simple models to characterize their comparative static properties, and quantify them with simulations based on market data. We conclude by discussing the obvious need to depart from these distortive rules-of-thumb that appear to have the potential to substantially reduce social welfare.

Keywords: Antitrust, Deterrence, Fines, Law Enforcement

JEL Classification: K21, L40

Suggested Citation

Katsoulacos, Yannis and Bageri, Vasiliki and Spagnolo, Giancarlo, The Distortive Effects of Antitrust Fines Based on Revenue (February 1, 2013). Bank of Greece Working Paper No. 153, Available at SSRN: https://ssrn.com/abstract=4182394 or http://dx.doi.org/10.2139/ssrn.4182394

Yannis Katsoulacos (Contact Author)

Athens University of Economics and Business ( email )

Vasiliki Bageri

Athens University of Economics and Business ( email )

No Address Available

Giancarlo Spagnolo

Stockholm School of Economics (SITE) ( email )

P.O. Box 6501
Stockholm
Sweden

HOME PAGE: http://https://sites.google.com/site/giancarlospagnoloshomepage/

Centre for Economic Policy Research (CEPR)

London
United Kingdom

University of Rome 'Tor Vergata' ( email )

Faculty of Economics - DEI
Via Columbia 2
Rome, RM 00133
Italy

EIEF ( email )

Via Due Macelli, 73
Rome, 00187
Italy

HOME PAGE: http://WWW.EIEF.IT

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