Advanced Search
MyIDEAS: Login

On the Design of Leniency Programs

Contents:

Author Info

  • Zhijun Chen
  • Patrick Rey

Abstract

Leniency programs contribute to destabilizing collusion but can also be abused and generate perverse effects. This paper develops a simple model capturing this trade-off, which we use to relate the optimal leniency policy (the carrot) to the effectiveness of investigations (the stick). We show that it is always desirable to offer some leniency before an investigation is launched; it is also optimal to offer some leniency once an investigation is underway when investigations are unlikely to succeed in uncovering cartels, absent self-reporting. Our analysis also confirms the usefulness of restricting leniency to the first informant only; in contrast, it does not support prohibiting leniency for repeat offenders.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.jstor.org/stable/pdfplus/10.1086/674011
Download Restriction: Access to the online full text or PDF requires a subscription.

File URL: http://www.jstor.org/stable/full/10.1086/674011
Download Restriction: Access to the online full text or PDF requires a subscription.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by University of Chicago Press in its journal The Journal of Law and Economics.

Volume (Year): 56 (2013)
Issue (Month): 4 ()
Pages: 917 - 957

as in new window
Handle: RePEc:ucp:jlawec:doi:10.1086/674011

Contact details of provider:
Web page: http://www.journals.uchicago.edu/JLE/

Related research

Keywords:

Other versions of this item:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Massimo Motta & Michele Polo, . "Leniency Programs and Cartel Prosecution," Working Papers 150, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  2. Aubert, Cecile & Rey, Patrick & Kovacic, William E., 2006. "The impact of leniency and whistle-blowing programs on cartels," International Journal of Industrial Organization, Elsevier, vol. 24(6), pages 1241-1266, November.
  3. Joseph E. Harrington, Jr, 2005. "Optimal Corporate Leniency Programs," Economics Working Paper Archive 527, The Johns Hopkins University,Department of Economics.
  4. Joseph E. Harrington, Jr, 2006. "Modelling the Birth and Death of Cartels with an Application to Evaluating Antitrust Policy," Economics Working Paper Archive 532, The Johns Hopkins University,Department of Economics.
  5. Spagnolo, Giancarlo, 2004. "Divide et Impera: Optimal Leniency Programmes," CEPR Discussion Papers 4840, C.E.P.R. Discussion Papers.
  6. Frezal, Sylvestre, 2006. "On optimal cartel deterrence policies," International Journal of Industrial Organization, Elsevier, vol. 24(6), pages 1231-1240, November.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Jensen, Sissel & Kvaløy, Ola & Olsen, Trond & Sørgard, Lars, 2013. "Crime and punishment: When tougher antitrust enforcement leads to higher overcharge," UiS Working Papers in Economics and Finance 2013/2, University of Stavanger.
  2. Emilie Dargaud & Andrea Mantovani & Carlo Reggiani, 2013. "The fight against cartels: a transatlantic perspective," Working Papers 2013/31, Institut d'Economia de Barcelona (IEB).
  3. Sauvagnat, Julien, 2014. "Are leniency programs too generous?," Economics Letters, Elsevier, vol. 123(3), pages 323-326.
  4. Michiel Bijlsma & Roel van Elk, 2008. "Opportunistic competition law enforcement," CPB Discussion Paper 110, CPB Netherlands Bureau for Economic Policy Analysis.
  5. Dessi, Roberta & Piccolo, Salvatore, 2009. "Two is Company, N is a Crowd? Merchant Guilds and Social Capital," IDEI Working Papers 529, Institut d'Économie Industrielle (IDEI), Toulouse, revised Jun 2013.
  6. Flavia Roldán, 2008. "Collusive networks in market sharing agreements in the presence of an antitrust authority," Economics Working Papers we085024, Universidad Carlos III, Departamento de Economía.
  7. Roldan, Flavia, 2011. "Covert networks and antitrust policy," IESE Research Papers D/932, IESE Business School.
  8. Evgenia Motchenkova & Rob Laan, 2011. "Strictness of leniency programs and asymmetric punishment effect," International Review of Economics, Springer, vol. 58(4), pages 401-431, December.
  9. Natalia Pavlova & Andrey Shastitko, 2014. "Effects Of Hostility Tradition In Antitrust: Leniency Programs And Cooperation Agreements," HSE Working papers WP BRP 58/EC/2014, National Research University Higher School of Economics.
  10. Acconcia, Antonio & Immordino, Giovanni & Piccolo, Salvatore & Rey, Patrick, 2013. "Accomplice-Witness and Organized Crime: Theory and Evidence from Italy," CEPR Discussion Papers 9543, C.E.P.R. Discussion Papers.
  11. Salvatore Piccolo & Giovanni Immordino, 2012. "Optimal Accomplice-Witnesses Regulation under Asymmetric Information," CSEF Working Papers 304, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:ucp:jlawec:doi:10.1086/674011. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Journals Division).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.