What if Cartel Fines are not high enough? Implications on Deterrence and Productive Efficiency
I develop a model in which cartel firms allocate costly effort to activities related to productive efficiency and concealment: the higher the fine or the probability of inspection, the more biased the firms' effort allocation towards concealment. In this context, a fine increase can improve wel...
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| Autor principal: | |
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| Formato: | Artículo revista |
| Lenguaje: | Inglés |
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Instituto de Economía y Finanzas. Facultad de Ciencias Económicas. Universidada Nacional de Córdoba.
2013
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| Acceso en línea: | https://revistas.unc.edu.ar/index.php/REyE/article/view/11876 |
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| Sumario: | I develop a model in which cartel firms allocate costly effort to activities related to productive efficiency and concealment: the higher the fine or the probability of inspection, the more biased the firms' effort allocation towards concealment. In this context, a fine increase can improve welfare through fewer cartels, but also reduce it through more inefficient surviving ones. The analysis suggests a carefully design of policy such that achieving a level of deterrence and productive (in)efficiency socially accepted. Within this framework, I also consider the implications of leniency programs. I show that leniency enhances incentives on deviation more that in standard models of collusion. |
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