Why Didn’t Antitrust Enforcement Raids Stop Price-Fixing in the Auto Industry?

Jonathan Tomlin describes how numerous manufacturers of automotive parts have recently entered into guilty pleas indicating that they engaged in price-fixing long after raids by antitrust enforcement agencies in their industry. Why did they continue to collude despite news of investigations that ultimately led to fines, civil lawsuits, and jail time for employees? Dr. Tomlin explains how the “economics of deterrence” can provide insights into this issue.

 

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