NCJ Number
107315
Journal
Southern Economic Journal Volume: 53 Issue: 4 Dated: (April 1987) Pages: 985-986
Date Published
1987
Length
12 pages
Annotation
This paper examines the deterrent effect of the damage provisions of Section IV of the Clayton Act on antitrust offenses, with a focus on marginal deterrence rather than total deterrence.
Abstract
Section IV of the Clayton Act provides for recovery of treble damages for any person who suffers injury to business or property due to an antitrust violation. This paper uses a Becker-Stigler crime model to investigate the effects of fines and damages in marginally deterring antitrust violations. Proportional fines, of which treble damages are an example, do not marginally deter illegal restraint of trade. Fines in general play a secondary role to litigation strategy in marginal deterrence when damages are as defined in current antitrust law. When damages are defined as monopolistic overcharge, all fines can cause cartels to further restrict output. An alternative approach is to have progressive fines determined from welfare loss, with fines levied on monopoly profit. This has the advantage of making the fine structure independent of litigation strategy and cost structure. 18 references and appended supplementary methodological information.