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Competition Policy and Price Fixing$
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Louis Kaplow

Print publication date: 2013

Print ISBN-13: 9780691158624

Published to Princeton Scholarship Online: October 2017

DOI: 10.23943/princeton/9780691158624.001.0001

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(p.322) 13 Sanctions
Competition Policy and Price Fixing

Louis Kaplow

Princeton University Press

This chapter analyzes sanctions, concentrating primarily on deterrence. In many instances, reflecting current practice, the most important instruments are fines levied by government enforcers and, where permitted, damages collected by injured parties. If the probability of sanctions and their magnitude are sufficient, most coordinated price elevation will be deterred. A major challenge in setting monetary sanctions is determining the extent of price elevation. The measurement problem is conceptually the same whether price elevation was accomplished through secret meetings, mere recognition of interdependence, or in any other manner. The threat of imprisonment as well as fines assessed against individual actors can be a useful supplement, particularly in light of agency problems within firms. Injunctions are also considered. Although much academic commentary fixates on injunctive relief, it is not evident that it is important in controlling coordinated oligopoly pricing.

Keywords:   sanctions, deterrence, monetary sanctions, injunctions, coordinated oligopoly pricing, price elevation

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