Optimal Leniency Programs When Firms Have Cumulative and Asymmetric Evidence

B-Tier
Journal: Review of Industrial Organization
Year: 2018
Volume: 52
Issue: 3
Pages: 403-427

Score contribution per author:

0.670 = (α=2.01 / 3 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Abstract An antitrust authority deters collusion with the use of fines and a leniency program. Firms have imperfect cumulative evidence of the collusion. That is, cartel conviction is not automatic if one firm reports. Reporting makes conviction only more likely: the more that firms report, the more likely is conviction. Furthermore, the evidence is distributed asymmetrically among firms. This set-up allows us meaningfully to analyze three typical features of leniency programs: minimum-evidence standards; ringleader discrimination; and marker systems. Minimum-evidence standards provide high-evidence firms with proper incentives to report. They are better at deterring than is ringleader discrimination. Under a marker system only one firm reports so that the antitrust authority never gets the entire available evidence. Appropriate minimum-evidence standards make a marker system redundant.

Technical Details

RePEc Handle
repec:kap:revind:v:52:y:2018:i:3:d:10.1007_s11151-017-9586-8
Journal Field
Industrial Organization
Author Count
3
Added to Database
2026-01-24