By the way, there’s an error in this essay: “They show that in virtually all cases fines were set below the optimal deterrence level; i.e. in spite of the sanctions, the cartels were profitable.” No. Just because the fine is below optimal deterrence level doesn’t mean the cartel was profitable. After all, ex post the probability of getting caught is 100%. So in your example a € 1 bn fine is below optimal level, but it still amounts to 4x the total cartel profit.

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