Cartel Ringleaders and the Corporate Leniency Program
AbstractCartel ringleaders can apply for amnesty in some jurisdictions (e.g., the E.U.), whereas in othersthey are excluded (e.g., the U.S.). This paper provides a survey of identified ringleaders inrecent European cartel cases and explores theoretically the effect of ringleader exclusion oncollusive prices. Our survey shows that (i) cartels often had more than one ringleader, (ii) therole of ringleaders was very diverse and (iii) ringleaders were typically the largest cartelmembers. Our theoretical analysis reveals that ringleader exclusion leads to higher prices when(iv) the joint profit maximum cannot be sustained under a nondiscriminatory leniency policy, (v)antitrust fines depend on individual cartel gains in a nonlinear fashion and (vi) the sizedistribution of members is sufficiently heterogeneous. These findings support the imposition ofantitrust penalties proportional to firm size when ringleaders are excluded from the corporateleniency program.
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Bibliographic InfoPaper provided by Maastricht : METEOR, Maastricht Research School of Economics of Technology and Organization in its series Research Memoranda with number 038.
Date of creation: 2011
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