Abstract
This paper investigates the effectiveness of the legal exception system (Council Regulation (EC) 1/2003) by running a Monte Carlo simulation for different only vaguely known input parameters of the system. Effectiveness is operationalized via the two subcriteria compliance to Art. 101 TFEU, i.e. deterrence of anticompetitive behavior, and the probabilities of type I ('false positive') and type II errors ('false negative') committed by the European Commission. A simulation reflecting the uncertainty of the input parameters delivers estimates for mean compliance levels as well as the overall expectations of the error probabilities for four different types of Perfect Bayesian Nash Equilibria: full-compliance, zero-compliance, positive-compliance and full-deterrence. Although zero compliance dominates the picture, there are also considerable fractions of full and positive compliance equilibria. In addition, we investigate the effects of changing the fine and the range of the control probabilities by restricting the simulation to subsets of the parameter space.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
