Scandinavian Working Papers in Economics
UiS Working Papers in Economics and Finance,
University of Stavanger
No 2013/2: Crime and punishment: When tougher antitrust enforcement leads to higher overcharge
Sissel Jensen, Ola Kvaløy (), Trond Olsen and Lars Sørgard
Additional contact information
Sissel Jensen: NHH
Ola Kvaløy: UiS, Postal: University of Stavanger, NO-4036 Stavanger, Norway
Trond Olsen: NHH
Lars Sørgard: NHH
Abstract: The economics of crime and punishment postulates that higher punishment leads to lower crime levels, or less severe crime. It is how- ever hard to get empirical support for this rather intuitive relationship. This paper offers a model that can contribute to explain why this is the case. We show that if criminals can spend resources to reduce the probability of being detected, then a higher general punishment level can increase the crime level. In the context of antitrust enforcement, the model shows that competition authorities who attempt to fight cartels by means of tougher sanctions for all offenders may actually lead cartels to increase their overcharge when leniency programs are in place.
Keywords: Antitrust Enforcement; Leniency; Economics of Crime
JEL-codes: A10
32 pages, March 6, 2013
Full text files
uis_wps_2013_2_jensen_kvaloy_olsen_sorgard.pdf
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