Scandinavian Working Papers in Economics
Discussion Paper Series in Economics,
Norwegian School of Economics, Department of Economics
No 4/2013: Crime and punishment: When tougher antitrust enforcement leads to higher overcharge.
Sissel Jensen (), Ola Kvaløy (), Trond E. Olsen () and Lars Sorgard ()
Additional contact information
Sissel Jensen: Dept. of Economics, Norwegian School of Economics and Business Administration, Postal: NHH , Department of Economics, Helleveien 30, N-5045 Bergen, Norway
Ola Kvaløy: University of Stavanger, Postal: University of Stavanger, 4036 Stavanger, Norway
Trond E. Olsen: Dept. of Economics, Norwegian School of Economics and Business Administration, Postal: NHH , Department of Economics, Helleveien 30, N-5045 Bergen, Norway
Lars Sorgard: Dept. of Economics, Norwegian School of Economics and Business Administration, Postal: NHH , Department of Economics, Helleveien 30, N-5045 Bergen, Norway
Abstract: The economics of crime and punishment postulates that higher punishment leads to lower crime levels, or less severe crime. It is however hard to get empirical support for this intuitive relationship. This paper o¤ers a model that contributes 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, it is shown that competition authorities who attempt to …ght cartels by means of tougher sanctions for all o¤enders may actually lead cartels to increase their overcharge when leniency programs are in place.
Keywords: antitrust enforcement; leniency programs; economics of crime.
JEL-codes: K21
32 pages, February 18, 2013
Full text files
04.pdf
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