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Global Cartels, Leniency Programs and International Antitrust Cooperation

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  • Jay Pil Choi
  • Heiko Gerlach

Abstract

In this paper we analyze cartel formation and self-reporting incentives when firms operate in several geographical markets and face antitrust enforcement in different jurisdictions. We are concerned with the effectiveness of leniency programs and the benefits of international antitrust cooperation between agencies. When international antitrust prosecution is uncoordinated, multi-market contact allows firms to reduce the amount of self-reporting in equilibrium and sustain cartels more effectively. We then discuss the effects of information sharing among antitrust authorities as a function of how much and which type of information is exchanged. We show that extensive information sharing might have an adverse effect on self-reporting by cartel members.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2010/wp-cesifo-2010-03/cesifo1_wp3005.pdf
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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3005.

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Date of creation: 2010
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Handle: RePEc:ces:ceswps:_3005

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Keywords: cartel formation; multi-market contact; leniency programs; international antitrust cooperation;

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References

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  1. 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.
  2. Yassine LEFOUILI & Catherine ROUX, 2008. "Leniency Programs for Multimarket Firms: The Effect of Amnesty Plus on Cartel Formation," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 08.05, Université de Lausanne, Faculté des HEC, DEEP.
  3. Jose Apesteguia & Martin Dufwenberg & Reinhard Selten, 2007. "Blowing the Whistle," Economic Theory, Springer, vol. 31(1), pages 143-166, April.
  4. Matsushima, Hitoshi, 2001. "Multimarket Contact, Imperfect Monitoring, and Implicit Collusion," Journal of Economic Theory, Elsevier, vol. 98(1), pages 158-178, May.
  5. Bryant, Peter G & Eckard, E Woodrow, Jr, 1991. "Price Fixing: The Probability of Getting Caught," The Review of Economics and Statistics, MIT Press, vol. 73(3), pages 531-36, August.
  6. Joseph E. Harrington, 2008. "OPTIMAL CORPORATE LENIENCY PROGRAMS -super-* ," Journal of Industrial Economics, Wiley Blackwell, vol. 56(2), pages 215-246, 06.
  7. Motta, Massimo & Polo, Michele, 2000. "Leniency Programs and Cartel Prosecution," CEPR Discussion Papers 2349, C.E.P.R. Discussion Papers.
  8. Spagnolo, G., 1999. "On Interdependent Supergames: Multimarket Contact, Concavity, and Collusion," Cambridge Working Papers in Economics 9914, Faculty of Economics, University of Cambridge.
  9. Brenner, Steffen, 2009. "An empirical study of the European corporate leniency program," International Journal of Industrial Organization, Elsevier, vol. 27(6), pages 639-645, November.
  10. Catherine Roux & Thomas von Ungern-Sternberg, 2007. "Leniency Programs in a Multimarket Setting: Amnesty Plus and Penalty Plus," CESifo Working Paper Series 1995, CESifo Group Munich.
  11. Bigoni, Maria & Fridolfsson, Sven-Olof & Le Coq, Chloé & Spagnolo, Giancarlo, 2008. "Fines, Leniency and Rewards in Antitrust: An Experiment," Working Paper Series 738, Research Institute of Industrial Economics, revised 06 Aug 2009.
  12. Spagnolo, Giancarlo, 2004. "Divide et Impera: Optimal Leniency Programmes," CEPR Discussion Papers 4840, C.E.P.R. Discussion Papers.
  13. Jay Pil Choi & Heiko Gerlach, 2009. "Multi-Market Collusion with Demand Linkages and Antitrust Enforcement," CESifo Working Paper Series 2632, CESifo Group Munich.
  14. Jay Pil Choi & Heiko Gerlach, 2010. "Global Cartels, Leniency Programs and International Antitrust Cooperation," CESifo Working Paper Series 3005, CESifo Group Munich.
  15. Jeroen Hinloopen & Adriaan R. Soetevent, 2008. "Laboratory evidence on the effectiveness of corporate leniency programs," RAND Journal of Economics, RAND Corporation, vol. 39(2), pages 607-616.
  16. Abreu, Dilip, 1988. "On the Theory of Infinitely Repeated Games with Discounting," Econometrica, Econometric Society, vol. 56(2), pages 383-96, March.
  17. Jay Pil Choi & Heiko Gerlach, 2009. "International Antitrust Enforcement and Multi-Market Contact," CESifo Working Paper Series 2599, CESifo Group Munich.
  18. Aubert, Cécile & Rey, Patrick & Kovacic, William E., 2006. "The impact of leniency and whistle-blowing programs on cartels," Economics Papers from University Paris Dauphine 123456789/13637, Paris Dauphine University.
  19. Nathan H. Miller, 2009. "Strategic Leniency and Cartel Enforcement," American Economic Review, American Economic Association, vol. 99(3), pages 750-68, June.
  20. B. Douglas Bernheim & Michael D. Whinston, 1990. "Multimarket Contact and Collusive Behavior," RAND Journal of Economics, The RAND Corporation, vol. 21(1), pages 1-26, Spring.
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Citations

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Cited by:
  1. Lefouili, Yassine & Roux, Catherine, 2012. "Leniency programs for multimarket firms: The effect of Amnesty Plus on cartel formation," International Journal of Industrial Organization, Elsevier, vol. 30(6), pages 624-640.
  2. Andrei Y. Shastitko & Svetlana V. Golovanova, 2014. "Collusion in markets characterized by one large buyer: lessons learned from an antitrust case in Russia," HSE Working papers WP BRP 49/EC/2014, National Research University Higher School of Economics.
  3. Jay Pil Choi & Heiko Gerlach, 2010. "Global Cartels, Leniency Programs and International Antitrust Cooperation," CESifo Working Paper Series 3005, CESifo Group Munich.
  4. Sánchez Navarro, Dennis, 2013. "Eficacia y asimetrías de los programas de delación en un contexto multi-mercado: un análisis del caso colombiano en el marco del TLC con Estados Unidos
    [Efficacy and asymmetries of the leniency
    ," MPRA Paper 48699, University Library of Munich, Germany.
  5. Budzinski, Oliver, 2012. "International antitrust institutions," Ilmenau Economics Discussion Papers 72, Ilmenau University of Technology, Institute of Economics.

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