Scandinavian Working Papers in Economics

Working Papers,
Copenhagen Business School, Department of Economics

No 02-2002: Must Trust Bust?

Peter Møllgaard
Additional contact information
Peter Møllgaard: Department of Economics, Copenhagen Business School, Postal: Department of Economics, Copenhagen Business School, Solbjerg Plads 3 C, 5. sal, DK-2000 Frederiksberg, Denmark

Abstract: Our trust in competition policy is based on faith in markets. When markets are oligopolies, already classical economists’ trust in competition busted: Oligopolies carry the seeds of collusion. To develop, collusion needs trust between firms. But new leniency programmes are designed to bust that trust. I discuss when trust busters are likely to succeed and when trust prevails.

Keywords: Competition policy; Oligopolies; Collusion; Trust; Leniency programmes

JEL-codes: G10; G18; L13

14 pages, February 4, 2002

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