| Abstract: | The U.S. Department of Justice has prosecuted over 1600 criminalantitrust (price-fixing and related) cases since 1970. Yet weknow precious little about the true genesis of these investigations.This paper uses the vector-autoregression methodology to examinethe dynamic interrelationships between the various criminaland civil antitrust enforcement variables. A key result is thatthe number of criminal prosecutions increases in the years immediatelyfollowing an increase in the number of civil cases, suggestingthat merger reviews and other civil investigations may alertthe antitrust authorities to criminal antitrust activities.To the best of my knowledge, this is the first econometric analysisthat demonstrates the quantitative size of this effect and thetime lags in the relationship. Other findings include importantdynamic interrelationships between grand jury investigations,the number of individuals and corporations prosecuted, and criminalcases, indicating that information unearthed during a givencriminal investigation and prosecution often reveals informationabout other conspiracies leading to future investigations andprosecutions. Finally, the number of criminal cases prosecutedincreases following an economic downturn. We relate this increaseto the literature, which points to cartel instability duringeconomic downturns. |
