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An Experimental Study of Leniency Programs

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  • Yasuyo Hamaguchi
  • Toshiji Kawagoe
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    Abstract

    Antitrust authorities of many countries have been trying to establish appropriate competition policies based on economic analysis. Recently an anti-cartel policy called a "leniency program" has been introduced in many countries as an effective policy to dissolve cartels. In this paper, we studied several kinds of leniency programs through laboratory experiments. We experimentally controlled for two factors: 1) cartel size: the number of cartel members in a group, small (two-person) or large (seven-person), 2) schedule of reduced fine: the number of firms that are given reduced fines. The experimental results showed that (1) an increase in the number of cartel members in a group increased the number of cartels dissolved, (2) changing the coverage of reduced fine had no significant effect both in two-player case and in seven-player case.

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    File URL: http://www.rieti.go.jp/jp/publications/dp/05e003.pdf
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    Bibliographic Info

    Paper provided by Research Institute of Economy, Trade and Industry (RIETI) in its series Discussion papers with number 05003.

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    Length: 25 pages
    Date of creation: Feb 2005
    Date of revision:
    Handle: RePEc:eti:dpaper:05003

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    References

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    1. Motta, M. & Polo, M., 1999. "Leniency Programs and Cartel Prosecution," Economics Working Papers eco99/23, European University Institute.
    2. Jose Apesteguia & Martin Dufwenberg & Reinhard Selten, 2007. "Blowing the Whistle," Economic Theory, Springer, vol. 31(1), pages 143-166, April.
    3. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, vol. 10(2), pages 171-178, June.
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    Cited by:
    1. Buccirossi, Paolo & Spagnolo, Giancarlo, 2006. "Optimal Fines in the Era of Whistleblowers," CEPR Discussion Papers 5465, C.E.P.R. Discussion Papers.
    2. Ulrich Blum & Nicole Steinat & Michael Veltins, 2008. "On the rationale of leniency programs: a game-theoretical analysis," European Journal of Law and Economics, Springer, vol. 25(3), pages 209-229, June.

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