Does Experience Make You ‘Tougher’? Evidence From Competition Law

Authors


  •  Corresponding author: Paul Grout, School of Economics, Finance & Management, 8 Woodland Road, Bristol, BS8 1TN, UK. Email: p.a.grout@bristol.ac.uk.

  • We are grateful to the editor, Jörn-Steffen Pischke, and an anonymous referee for comments that improved the manuscript significantly. In addition, we are grateful for helpful comments from Tim Besley, Paul Clarke, David De Meza, Mathias Dewatripont, Matthew Ellman, Patrick François, Maitreesh Ghatak, Ian Jewitt, Clare Leaver, Fabien Postel-Vinay, Carol Propper, Richard Smith, Frank Windmeijer and participants of the Industrial Economics Seminar (Ecole Polytechnique, Paris), IESE (Barcelona), Max Planck Institute (Bonn), European University Institute (Florence), ACLE (Amsterdam), Warwick Business School, Erasmus University Rotterdam, ESRC Public Organisation Conference (London School of Economics), EC European Science Foundation Conference on Partnership and Privatisation (University of Bristol), and the Competition Commission, London. We are grateful to the Leverhulme Trust and ESRC for funding this research.

Abstract

This article investigates experience effects for public officials. Using a unique data set of companies investigated under UK competition law, we find very strong experience effects for chairmen of investigation panels, estimated from the increase in experience of individual chairman. Probit and IV probit regressions indicate that replacing an inexperienced chairman with one of average experience increases the probability of a ‘guilty’ outcome by approximately 30% and, after chairing around 30 cases, a chairman is predicted to find almost every case guilty.

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