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On the allocation of evidence among cartelists under a leniency program

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Abstract

The impact of leniency programs on cartelists’ decision to allocate the incriminating evidence is investigated. Firms are allowed to possess either exclusive or common pieces of cartel-related evidence. The cartel organization is able to allocate the incriminating evidence in an attempt to enhance the sustainability of the illicit agreement. Assuming that the Antitrust Authority (AA) provides incentives that induce confession, reporting is either partial or universal. It is shown that in the former case the cartel organization selects to split and equally share the evidence (each firm possesses only exclusive pieces) whereas in the latter case every firm may possess perfect evidence. Unless the conviction of an investigated cartel is unlikely, when the AA optimally anticipates the cartel’s ability to allocate the evidence, only partial information is obtained.

Suggested Citation

  • Konstantinos Charistos, 2018. "On the allocation of evidence among cartelists under a leniency program," Discussion Paper Series 2018_11, Department of Economics, University of Macedonia, revised Oct 2018.
    • Handle: RePEc:mcd:mcddps:2018_11
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    File URL: http://aphrodite.uom.gr/econwp/pdf/dp112018.pdf
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    Keywords

    Antitrust enforcement; Collusion; Leniency programs.;
    All these keywords.

    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices

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