Maximal Cartel Pricing and Leniency Programs

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Maximal Cartel Pricing and Leniency Programs

Author Info

Harold Houba () (VU University Amsterdam)
Evgenia Motchenkova () (VU University Amsterdam)
Quan Wen () (Vanderbilt University, Nashville (TN), USA)

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Abstract

For a general class of oligopoly models with price competition, we analyze the impact of ex-ante leniency programs in antitrust regulation on the endogenous maximal-sustainable cartel price. This impact depends upon industry characteristics including its cartel culture. Our analysis disentangles the effects of traditional antitrust regulation and the leniency program. Ex-ante leniency programs are effective if and only if these offer substantial rewards to the self-reporting firm. This is in contrast to currently employed programs that are therefore ineffective.

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Publisher Info
Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 08-120/1.

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Date of creation: 17 Dec 2008
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Handle: RePEc:dgr:uvatin:20080120

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Paper
- Houba, H.E.D. & Motchenkova, E. & Wen, Q., 2008. "Maximal Cartel Pricing and Leniency Programs," Discussion Paper 2008-046, Tilburg University, Tilburg Law and Economic Center.

Find related papers by JEL classification:
L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

This paper has been announced in the following NEP Reports:

NEP-ALL-2009-01-17 (All new papers)
NEP-BEC-2009-01-17 (Business Economics)
NEP-COM-2009-01-17 (Industrial Competition)
NEP-IND-2009-01-17 (Industrial Organization)
NEP-LAW-2009-01-17 (Law & Economics)
NEP-MIC-2009-01-17 (Microeconomics)
NEP-REG-2009-01-17 (Regulation)

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.:

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Other versions:
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Other versions:
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Other versions:
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Other versions:
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Motta, Massimo & Polo, Michele, 2003. "Leniency programs and cartel prosecution," International Journal of Industrial Organization, Elsevier, vol. 21(3), pages 347-379, March. [Downloadable!] (restricted)
Other versions:
- Motta, Massimo & Polo, Michele, 2000. "Leniency Programs and Cartel Prosecution," CEPR Discussion Papers 2349, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
- Massimo Motta & Michele Polo, . "Leniency Programs and Cartel Prosecution," Working Papers 150, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University. [Downloadable!]
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