Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/100328 
Title: 

Legal Uncertainty

The document was removed on behalf of the author(s)/ the editor(s).

Authors: 
Year of Publication: 
2014
Series/Report no.: 
Beiträge zur Jahrestagung des Vereins für Socialpolitik 2014: Evidenzbasierte Wirtschaftspolitik - Session: Industrial Organization IV No. D11-V3
Publisher: 
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften, Leibniz-Informationszentrum Wirtschaft, Kiel und Hamburg
Abstract: 
This article considers legal uncertainty in competition law. Contrary to perceived wisdom, I show that the uncertainty itself might have positive welfare effects, if it is sufficiently small. Legal uncertainty functions as a screening device provided that the threshold of legality is uncertain. Then, near the threshold, firms decision whether to pursue controversial business practices varies with their type. This allows mitigating the policy restrictions, as the competition authority cannot perfectly observe the types of the firms. Such an effect might influence the trade-off between per-se rules and rules of reason in competition law. In an extension, I discuss the effects of introducing ambiguity about the fine. I prove that this ambiguity mitigates enforcement problems if auditing costs are sufficiently high.
JEL: 
K20
K42
L51
Document Type: 
Conference Paper

Files in This Item:
The document was removed on behalf of the author(s)/ the editor(s) on: June 13, 2017
There are no files associated with this item.


Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.