Objectives and the Optimal Structure of Competition Authorities Revisited

This article contributes to the discussion of the implications of different objectives pursued by the competition authorities (CAs) for their optimal structure in terms of whether one or more functions (or activities) should be assigned to them. Different areas of enforcement activity that can be assigned to CAs may differ in the extent to which they contribute to welfare-enhancing or reputation-enhancing objectives. In their recent paper, Avdasheva et al. (Rev Ind Organ 54:251–282, 2019) showed that when the CAs are reputation-maximizing, it may then be optimal to have activities undertaken by specialist authorities, each specializing in one activity. In this article, we generalize the utility function of the CAs, allowing also the welfare impact of the decisions made to influence their utility, and show that if the CAs are welfare maximizers, then all the activities should be undertaken by one generalist authority.