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PRIVATE ANTITRUST ENFORCEMENT IN THE PRESENCE OF PRE‐TRIAL BARGAINING *
Author(s) -
BOURJADE SYLVAIN,
REY PATRICK,
SEABRIGHT PAUL
Publication year - 2009
Publication title -
the journal of industrial economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.93
H-Index - 77
eISSN - 1467-6451
pISSN - 0022-1821
DOI - 10.1111/j.1467-6451.2009.00383.x
Subject(s) - plaintiff , damages , settlement (finance) , enforcement , competition (biology) , business , compensation (psychology) , private information retrieval , law , law and economics , actuarial science , economics , computer security , political science , finance , computer science , psychology , ecology , psychoanalysis , payment , biology
We study the effect of encouraging private actions for breaches of competition law. We develop a model of litigation and settlement with asymmetric information. We show that screening liable from non‐liable defendants requires the Court to restrict the rules governing admissible evidence. We study how to design the rules so as to enhance the role of private litigation in antitrust enforcement and prove that increasing damages is better than reducing costs of initiating suits. We also find large benefits from introducing a system of compensation for defendants found non‐liable, paid by unsuccessful plaintiffs.