Arbeitspapier

Competitive pressure and corporate crime

This paper explores the relationship between the intensity of competition in product markets and firms' incentives to lower their production costs by illegal means. Our framework combines a Salop circle with a crime model à la Becker, allowing us to differentiate between several measures for the intensity of competition. We establish that more firms in the industry (i.e., lower entry costs) reduce the crime rate. Furthermore, whether more intense competition due to the increased substitutability of products raises or lowers the prevalence of criminal behavior can be clearly linked to the impact of such behavior on firms' production costs. Finally, we find that stricter law enforcement may entice more firms to enter the market, despite the higher expected sanction in the event of wrongdoing.

Sprache
Englisch
ISBN
9783863041090

Erschienen in
Series: DICE Discussion Paper ; No. 110

Klassifikation
Wirtschaft
Criminal Law
Regulated Industries and Administrative Law
Oligopoly and Other Imperfect Markets
Thema
product market competition
crime
deterrence
market entry

Ereignis
Geistige Schöpfung
(wer)
Baumann, Florian
Friehe, Tim
Ereignis
Veröffentlichung
(wer)
Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE)
(wo)
Düsseldorf
(wann)
2013

Handle
Letzte Aktualisierung
20.09.2024, 08:21 MESZ

Datenpartner

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Objekttyp

  • Arbeitspapier

Beteiligte

  • Baumann, Florian
  • Friehe, Tim
  • Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE)

Entstanden

  • 2013

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