The Determination of Optimal Fines in Cartel Cases The Myth of Underdeterrence

Marie-Laure Allain (1) , Marcel Boyer (1, 2) , Rachidi Kotchoni (3) , Jean-Pierre Ponssard (1)

1 X-DEP-ECO - Département d'Économie de l'École Polytechnique
2 UdeM - Université de Montréal
3 University of Alberta

The determination of optimal fines to deter the formation or continuation of cartels is a major objective of competition policy. We provide an analysis of static and dynamic frameworks to characterize the restitution and deterrence properties of fines: cartel stability depends on their ability to prevent deviation by firms, while the benefit of a deviation depends on the fines to be imposed in case of detection by the antitrust authority. We show that the proper consideration of the dynamics of competition has a major impact on the determination of optimal dissuasive fines: our results suggest that a clear majority of fines imposed by the European Commission in recent years meet the deterrence objective.

Mots clés: Optimal fines; Cartels

Domaines: Finance quantitative [q-fin.CP]

Marie-Laure Allain, Marcel Boyer, Rachidi Kotchoni, Jean-Pierre Ponssard. The Determination of Optimal Fines in Cartel Cases The Myth of Underdeterrence. 2011. ⟨hal-00631432⟩