Antitrust policy and price collusion: public agency versus delegation

This paper investigates the effectiveness of antitrust policy in fighting horizontal collusion under different regimes of policy implementation. We consider two regimes: a public agency regime and a ``delegation'' regime, where the policy is chosen by consumers. The analysis shows that delegation dominates the public agency regime because consumers start off a higher level of investigation activity than the public agency. While the public agency will fight the cases involving ``relevant'' violations, consumers will act also against ``minor'' ones. The combination of the two regimes yields an higher welfare than just having a public agency, because consumers can partially relax the agency's limited resources constraint.