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Title:Fighting cartels: some economics of council regulation (EC) 1/2003 PDF Logo
Authors:Will, Birgit E.
Schmidtchen, Dieter
Issue Date:2008
Series/Report no.:CSLE discussion paper series 2008-02
Abstract:This paper investigates the effectiveness of the new Council Regulation (EC) 1/2003 which replaces the mandatory notification and authorization system by a legal exception system. Effectiveness is operationalized via the two subcriteria compliance to Art. 81 EC Treaty and the probabilities of type I and type II errors committed by the European Commission. We identify four different types of Perfect Bayesian Nash Equilibria: fullcompliance, zero-compliance, positive-compliance and full-deterrence. We show that the Commission can, in principle, hit the full-compliance equilibrium, where the cartelizing firms fully obey the requirements of Art 81(3) EC Treaty and both error probabilities are zero.
Subjects:competition law
cartel law enforcement
legal exception
imperfect
JEL:K21
K42
L40
Document Type:Working Paper
Appears in Collections:CSLE Discussion Paper Series, CSLE - Center for the Study of Law and Economics, Universität des Saarlandes

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