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dc.contributor.authorUlph, David Tregear
dc.contributor.authorKatsoulacos, Yannis
dc.date.accessioned2014-10-20T15:01:03Z
dc.date.available2014-10-20T15:01:03Z
dc.date.issued2014-07-01
dc.identifier.citationUlph , D T & Katsoulacos , Y 2014 ' Legal uncertainty, competition law enforcement procedures and optimal penalties ' School of Economics & Finance Discussion Paper , no. 1410 , University of St Andrews , pp. 1-35 .en
dc.identifier.issn0962-4031
dc.identifier.otherPURE: 155752154
dc.identifier.otherPURE UUID: 4e55bfcc-9afc-42fc-8b6d-3c7118d3f6b8
dc.identifier.otherORCID: /0000-0003-3171-1270/work/59464520
dc.identifier.urihttps://hdl.handle.net/10023/5564
dc.description.abstractIn this paper we make three contributions to the literature on optimal Competition Law enforcement procedures. The first (which is of general interest beyond competition policy) is to clarify the concept of “legal uncertainty”, relating it to ideas in the literature on Law and Economics, but formalising the concept through various information structures which specify the probability that each firm attaches – at the time it takes an action – to the possibility of its being deemed anti-competitive were it to be investigated by a Competition Authority. We show that the existence of Type I and Type II decision errors by competition authorities is neither necessary nor sufficient for the existence of legal uncertainty, and that information structures with legal uncertainty can generate higher welfare than information structures with legal certainty – a result echoing a similar finding obtained in a completely different context and under different assumptions in earlier Law and Economics literature (Kaplow and Shavell, 1992). Our second contribution is to revisit and significantly generalise the analysis in our previous paper, Katsoulacos and Ulph (2009), involving a welfare comparison of Per Se and Effects- Based legal standards. In that analysis we considered just a single information structure under an Effects-Based standard and also penalties were exogenously fixed. Here we allow for (a) different information structures under an Effects-Based standard and (b) endogenous penalties. We obtain two main results: (i) considering all information structures a Per Se standard is never better than an Effects-Based standard; (ii) optimal penalties may be higher when there is legal uncertainty than when there is no legal uncertainty.
dc.format.extent35
dc.language.isoeng
dc.publisherUniversity of St Andrews
dc.relation.ispartofen
dc.relation.ispartofseriesSchool of Economics & Finance Discussion Paperen
dc.rights(c) the author 2014en
dc.subjectcompetition law enforcementen
dc.subjectpenaltiesen
dc.subjectlegal uncertaintyen
dc.subjectcompetition policyen
dc.subjectK Law (General)en
dc.subjectHB Economic Theoryen
dc.subject.lccK1en
dc.subject.lccHBen
dc.titleLegal uncertainty, competition law enforcement procedures and optimal penaltiesen
dc.typeWorking or discussion paperen
dc.contributor.sponsorEconomic & Social Research Councilen
dc.description.versionPostprinten
dc.contributor.institutionUniversity of St Andrews. School of Economics and Financeen
dc.identifier.grantnumberRES-062-23-2211en


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