Optimal Sanctions for Antitrust Violations

Although economic analysis of the common law, crime, and legal decision making are relatively recent areas of research in the field of law and economics, economic analysis of antitrust, particularly the analysis of business practices described in antitrust cases, has been widespread and uncontroversial for many years. What has received less attention is the use of economics to examine antitrust enforcement itself.' This involves analyzing, for example, what is an antitrust injury, the appropriate sanctions for such an injury, the choice between public and private enforcement of antitrust laws and related questions on standing to sue, and the relevance of the antitrust victim's conduct to his ability to recover damages. In this paper I apply economics to some of the above issues. Economic analysis of antitrust enforcement builds on the pioneering papers of Gary Becker and Ronald Coase.2 Becker's paper was the first formal analysis of optimal penalties and probabilities of apprehension and conviction for criminal offenses. He showed