Private antitrust enforcement and the role of harmed parties in public enforcement

It is commonly believed that the possibility to sue privately for antitrust damages increases the probability that anticompetitive actions are prosecuted at the cost of an increased probability that procompetitive actions are prosecuted. We extend the analysis by taking into account that private parties often submit evidence during public investigation. Such parties consider private suit as a partial substitute for public prosecution. The trial option might induce these parties to be less willing to contribute evidence to public cases. Private trials crowd out public prosecution. In effect, the probability of prosecution of anticompetitive actions might decrease, while the earlier result that the probability of prosecuted actions being prosecuted is confirmed. In general, while the attractiveness of trials weakly decreases by considering a reporting possibility, they can remain an enforcement efficacy increasing institution.     

Measuring the deterrent effect of enforcement operations on drug smuggling, 1991–1999

This study examines a crucial question: What kind of effect do interdiction and other drug enforcement activities have on drug smuggling? Do they actually deter smuggling, or is their effect more one of disruption and displacement?...     

Hospital mergers: the shift from federal antitrust enforcement to state regulation

The authors examine and analyze the burgeoning merger activity in the hospital arena, as well as the nonfederal attempts made to regulate that activity. They conclude that the present, ad hoc, system of state regulation is sorely wanting and that it would be preferable if stronger antitrust enforcement and judical decisions prevented competition reducing mergers. If a merger results in a true monopoly (and nonetheless passes antitrust scrutiny), its regulation should be the responsibility of the pertinent state public utility board which, unlike the courts and state attorneys general, has sufficient expertise to adequately regulate the merged entities. Otherwise, the faults of the present system, which is easily manipulated by hospitals seeking political and legal cover for their activities, are likely to be perpetuated.     

Law enforcement information sharing: A Florida case study

Many attempts have been made over the last several decades to improve communication among law enforcement agencies. This article is a case study of a “low-level” data sharing project in Florida that could serve as a national model. The Florida Law Enforcement Data Sharing Consortium is a partnership between the University of Central Florida and more than one hundred law enforcement agencies. It offers an inexpensive, yet technically advanced alternative to the proprietary data sharing model. Its distributed architecture was endorsed by the Markle Foundation, the 9/11 Commission, and the 2004 National Security Act. Civil liberties concerns raised by this and other types of data sharing projects are discussed.     

Optimal enforcement of competition policy: the commitments procedure under uncertainty

The introduction of a commitments procedure in EU antitrust policy (Article 9 of Council Regulation 1/2003) has entitled the the European Commission to extensively settle cases of alleged anticompetitive conduct. In this paper, we use a formal model of law enforcement to identify the optimal procedure to remedy cases in a context of partial legal uncertainty (Katsoulacos and Ulph in Eur J Law Econ 41(2):255–282, 2016). We discuss in particular the merits of a policy of selective commitments where firms either take strong commitments or are investigated under the standard infringement procedure.     

The deterrent effect of executions: A meta-analysis thirty years after Ehrlich

In 1975, Ehrlich published a seminal paper in American Economic Review which argued that executions prevent murders in America. Subsequent empirical studies varied in their methodology and the time-period/region/country covered, and therefore it is difficult to draw a clear conclusion about the deterrent effect of executions. This article applies a meta-analysis to combine the results from refereed studies in order to summarize objectively the findings. The overall results of the meta-analysis supported the deterrent effect of executions, but the evidence for a deterrent effect depended on the type of study carried out (time-series and panel data versus cross-sectional data and the effects of publicity).     

Do the experiential and deterrent effect operate differently across gender?

Deterrence research showed that successful criminal episodes tended to erode the effect of sanction risks. In particular, experience with offending—especially offending without punishment—was believed to cause individuals to lower their unrealistically high expectations of sanction risk. At the same time, other research showed that deterrence could work for some individuals such that high perceptions of sanction certainty tended to inhibit future episodes of criminal activity. One unanswered question was the extent to which these ‘experiential’ and ‘deterrent’ effects operated differently across gender. Self-reported survey information on over 2,000 adolescents was employed to examine whether the experiential and deterrent effects varied across gender. Results indicated more similarities than differences linking deterrent and experiential effects to self-reported delinquency. Future research directions are outlined.     

Further notes on information,corruption, and optimal law enforcement

We consider two important notes on optimal law enforcement with corruption. First, we analyze the role of asymmetric information on the emergence of collusion between criminals and enforcers. Second, our paper proposes that the optimal criminal sanction for the underlying offense is not necessarily maximal. We achieve this result by coupling the criminal sanction for the underlying offense with a criminal sanction for corruption, both imposed on offenders. A higher criminal sanction for the underlying offense implies that the government must spend more resources to detect and punish corruption (since the likelihood of collusion increases). Thus, the government could reduce this sanction, save on detection, and increase the criminal sanction for corruption (in order to offset the negative effect on deterrence). We are grateful to Mitch Polinsky and two anonymous referees for helpful suggestions. The usual disclaimers apply.     

Money laundering laws as a political instrument: the social cost of arbitrary money laundering enforcement

The paper explains the reasons for modern money laundring legislation, namely to reduce the incidence of certain primary offences. Whereas enactment and effectuation of this legislation is costly, its postive effects typically materialize in other jurisdictions (positive external effects). The paper shows that international covenants seek to give direct incentives to overcome the possible underprovision in anti-money laundering legislation and enforcement. The paper also shows how, in such an international context, anti-money laundering legislation can be easily misused as a political weapon in the cross-border fight against "unwanted individuals" and gives concrete examples for such an arbitrary enforcement.

Hospital mergers and antitrust: an economic analysis

The hospital industry has recently experienced substantial merger activity. This paper examines several actual and proposed hospital mergers to determine the extent of competition in the affected markets and the effect these mergers may have on competition. Our focus is on mergers between hospitals in the same market. We define the relevant product and geographic market for hospitals, then develop criteria for evaluating hospital mergers and analyze several merger cases using these criteria. We conclude that these mergers threaten the competition that exists in most of the markets discussed, and that the claimed efficiency justification for mergers is not convincing.     

Optimal law enforcement and the economics of the drug market: Some comments on the Schengen Agreements

In this paper, we extend the optimal law enforcement model to the illegal trade and consumption of narcotics. Three sources of risk in the narcotic business are considered: (1) The consumer can be detected while consuming narcotics; (2) the consumer and the retailer can be detected at the time of sale to the consumer; and (3) the retailer and the producer can be detected at the time of sale to the retailer. We derive the two levels of market equilibrium and a set of comparative static results. The welfare analysis is used to comment on the Schengen Agreements and the implications for the market of narcotics.     

The deterrent effect of the perceived certainty and severity of punishment: A review of the evidence and issues

This paper critically examines the role of the perceived certainty and severity of punishment in deterring criminal/deviant behavior. A thorough review of the perceptual deterrence literature from 1972–1986 is provided which indicates that cross-sectional correlations between perceptions of sanction threats and self-reported criminal/deviant behavior are moderately negative for diverse offenses, consistent with the deterrence doctrine. It is noted that rather than expressing the deterrent effect, these correlations probably indicate the effect of prior behavior on currently held perceptions—the experiential effect. In addition, since in many instances the reported correlations express simple bivariate relationships, the association may be spurious rather than causal. When researchers employing panel designs have estimated the deterrent relationship with variables in their correct temporal ordering and with more fully specified causal models, the moderate inverse effect for both perceived certainty and severity disappears. Although this would argue strongly for the continued utilization of longitudinal data and fully developed models of deterrence/social control, recent commentaries have raised questions about this line of perceptual deterrence research. These arguments are assessed and an agenda for future deterrence research suggested.     

Doctors and hospitals: an antitrust perspective on traditional relationships

Under new pressures for cost containment, hospitals are increasingly asserting interests that conflict with those of physicians. Professor Havighurst argues that legal rules under which practitioners have challenged denials of hospital admitting privileges should be clarified in order that hospitals can more effectively carry out their new cost-containment and other responsibilities. He invokes antitrust law's "essential-facilities" doctrine to protect those abused by their competitors on a hospital staff, but he contends that, if a hospital participates in decisionmaking as an independent actor--even though it acts in concert with its physicians--, antitrust courts should lower the level of scrutiny to a point at which most challenges can be dismissed summarily. He analogizes restraints imposed by hospitals on competition between health professionals to vertical restraints of other kinds, and draws conclusions critical of doctrine traditionally applicable to the latter.