Centre for Competition Policy
High quality independent research into competition policy and regulation
Working Paper 18-6 v3 (updated April 2020)
Public and Private Sanctions: The case of cartels
AUTHORS: Franco Mariuzzo, Peter L. Ormosi, Antonios Karatzas, Zherou Majied
ABSTRACT: In this article, we revive an old debate in the law and economics literature: the relative role of public and reputational sanctions in deterring misconduct. We propose an empirical framework, which accounts for public sanctions and a more direct measure of reputational sanctions, harnessing recent developments in opinion mining. We use the intensity and the sentiment of media exposure of misconduct as a measure of reputational effect and thus approximation of the reputational sanction. As a demonstration, we combine an event study approach, sentiment analysis, and econometric techniques on a sample of 339 listed cartel member firms, prosecuted by the European Commission between 1992 and 2015. Our results offer evidence that in the context of cartels, public and reputational sanctions act as substitutes.
CITATION: Mariuzzo, F, Ormosi, P, Karatzas, A, & Majied, Z (2018) "Public and Private Sanctions: The case of cartels"
Publication Links
New Publications
CCP Book
Behavioural Economics in Competition and Consumer Policy
Subscription Members
The following organisations are subscribed to the CCP Membership Scheme and their support is gratefully acknowledged
[Membership of this scheme or use of members’ logos does not imply agreement by those organisations with any of the views or ideas published by CCP or any of its staff and students]
