Sanctions are often so weak that a money maximizing individual would not be deterred. In this paper I show that they may nonetheless serve a forward looking purpose if sufficiently many individuals are averse against advantageous inequity. Using the Fehr/Schmidt model (QJE 1999) I define three...

The European Commission is working on a revision of its Guidelines on Research and Development Agreements. On this occasion, this note surveys the existing experimental evidence. Experiments add a number of additional arguments to the normative assessment. R&D agreements have a much smaller...

Both in the US and in Europe, antitrust authorities prohibit merger not only if the merged entity, in and of itself, is no longer sufficiently controlled by competition. The authorities also intervene if, post merger, the market structure has changed such that "tacit collusion" or "coordinated...

Most apparent differences between US and continental law lose their relevance once one looks beneath the doctrinal surface and checks how doctrine plays itself out in concrete cases. One of the few exceptions is standards of proof. Not only distinguishes US law between "preponderance of the...

Hardly any antitrust lawyer would deny that antitrust needs solid foundations in economics. Antitrust authorities hire economists, if they do not even haven the position of a chief economist. Antitrust not only capitalises on economic theory, but it is equally sensitive to empirical studies, be...

Cartels are inherently instable. Each cartelist is best off if it breaks the cartel, while the remaining firms remain loyal. If firms interact only once, if products are homogenous, if firms compete in price, and if marginal cost is constant, theory even predicts that strategic interaction...