Effects of Leniency Programs on Cartel Stability

E. Motchenkova

Research output: Working paperDiscussion paperOther research output

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Abstract

This paper studies the effect of leniency programs on the stability of cartels under two different regimes of fines, fixed and proportional.We analyze the design of self-reporting incentives, having a group of defendants.Moreover, we consider a dynamic setup, where accumulated (not instantaneous) benefits and losses from crime are taken into account.We obtain that cartel occurrence is less likely if the rules of the leniency programs are more strict and the procedure of application for leniency is more confidential.Moreover, we conclude that, when the procedure of application for leniency is not confidential and penalties and rate of law enforcement are low, leniency may increase duration of cartel agreements.Surprisingly, under a fixed penalty scheme the introduction of a leniency program cannot improve the effectiveness of antitrust enforcement when the procedure of application for leniency is not confidential.
Original languageEnglish
Place of PublicationTilburg
PublisherMicroeconomics
Number of pages33
Volume2004-98
Publication statusPublished - 2004

Publication series

NameCentER Discussion Paper
Volume2004-98

Fingerprint

Cartel stability
Leniency
Leniency programs
Penalty
Cartel
Cartels
Law enforcement
Crime
Antitrust enforcement
Incentives
Self-reporting

Keywords

  • antitrust
  • law
  • policy

Cite this

Motchenkova, E. (2004). Effects of Leniency Programs on Cartel Stability. (CentER Discussion Paper; Vol. 2004-98). Tilburg: Microeconomics.
Motchenkova, E. / Effects of Leniency Programs on Cartel Stability. Tilburg : Microeconomics, 2004. (CentER Discussion Paper).
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Motchenkova, E 2004 'Effects of Leniency Programs on Cartel Stability' CentER Discussion Paper, vol. 2004-98, Microeconomics, Tilburg.

Effects of Leniency Programs on Cartel Stability. / Motchenkova, E.

Tilburg : Microeconomics, 2004. (CentER Discussion Paper; Vol. 2004-98).

Research output: Working paperDiscussion paperOther research output

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AB - This paper studies the effect of leniency programs on the stability of cartels under two different regimes of fines, fixed and proportional.We analyze the design of self-reporting incentives, having a group of defendants.Moreover, we consider a dynamic setup, where accumulated (not instantaneous) benefits and losses from crime are taken into account.We obtain that cartel occurrence is less likely if the rules of the leniency programs are more strict and the procedure of application for leniency is more confidential.Moreover, we conclude that, when the procedure of application for leniency is not confidential and penalties and rate of law enforcement are low, leniency may increase duration of cartel agreements.Surprisingly, under a fixed penalty scheme the introduction of a leniency program cannot improve the effectiveness of antitrust enforcement when the procedure of application for leniency is not confidential.

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Motchenkova E. Effects of Leniency Programs on Cartel Stability. Tilburg: Microeconomics. 2004. (CentER Discussion Paper).