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The Impact of the Corporate Leniency Program on Cartel Formation and the Cartel Price Path Author info | Abstract | Publisher info | Download info | Related research | Statistics Joe Chen (Faculty of Economics, University of Tokyo)
Joseph E. Harrington, Jr. (Department of Economics, Johns Hopkins University)
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Previous research exploring the effect of corporate leniency programs has modelled the oligopoly stage game as a Prisoners' Dilemma. Using numerical analysis, we consider the Bertrand price game and allow the probability of detection and penalties to be sensitive to firms' prices. Consistent with earlier results, a maximal leniency program necessarily makes collusion more difficult. However, we also find that par-tial leniency programs - such as in the U.S.- can make collusion easier compared too offering no leniency. We also show that even if cartel formation is not deterred, a leniency program can reduce the prices charged by firms.
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Paper provided by CIRJE, Faculty of Economics, University of Tokyo in its series CIRJE F-Series with number
CIRJE-F-358.
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Length: 31 pages
Date of creation: Aug 2005Date of revision:
Handle: RePEc:tky:fseres:2005cf358Contact details of provider: Web page: http://www.e.u-tokyo.ac.jp/cirje/index.htm
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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.: Harrington, Joseph Jr., 2003.
"Some implications of antitrust laws for cartel pricing ,"
Economics Letters ,
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[Downloadable!] (restricted)
Joseph E. Harrington, Jr., 2004.
"Cartel Pricing Dynamics in the Presence of an Antitrust Authority ,"
RAND Journal of Economics ,
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Other versions: Giancarlo Spagnolo, 2004.
"Divide et Impera. Optimnal Deterrence Mechanisms Against Cartels and Organized Crime ,"
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485, Econometric Society.
[Downloadable!]
Harrington, Joseph Jr. & Chen, Joe, 2006.
"Cartel pricing dynamics with cost variability and endogenous buyer detection ,"
International Journal of Industrial Organization ,
Elsevier, vol. 24(6), pages 1185-1212, November.
[Downloadable!] (restricted)
Other versions:
Joseph E. Harrington, Jr. & Joe Chen, 2005.
"Cartel Pricing Dynamics with Cost Variability and Endogenous Buyer Detection ,"
CIRJE F-Series
CIRJE-F-359, CIRJE, Faculty of Economics, University of Tokyo.
[Downloadable!] Joseph E Harrington Jr & Joe Chen, 2002.
"Cartel Pricing Dynamics with Cost Variability and Endogenous Buyer Detection ,"
Economics Working Paper Archive
514, The Johns Hopkins University,Department of Economics, revised Sep 2004.
[Downloadable!] Philippe Cyrenne, 1999.
"On Antitrust Enforcement and the Deterrence of Collusive Behaviour ,"
Review of Industrial Organization ,
Springer, vol. 14(3), pages 257-272, May.
[Downloadable!] (restricted)
Joseph E. Harrington, Jr, 2005.
"Optimal Corporate Leniency Programs ,"
Economics Working Paper Archive
527, The Johns Hopkins University,Department of Economics.
[Downloadable!]
Abrantes-Metz, Rosa M. & Froeb, Luke M. & Geweke, John & Taylor, Christopher T., 2006.
"A variance screen for collusion ,"
International Journal of Industrial Organization ,
Elsevier, vol. 24(3), pages 467-486, May.
[Downloadable!] (restricted)
Joseph E. Harrington, 2005.
"Optimal Cartel Pricing In The Presence Of An Antitrust Authority ,"
International Economic Review ,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 46(1), pages 145-169, 02.
[Downloadable!] (restricted)
Other versions: Green, Edward J & Porter, Robert H, 1984.
"Noncooperative Collusion under Imperfect Price Information ,"
Econometrica ,
Econometric Society, vol. 52(1), pages 87-100, January.
[Downloadable!] (restricted)
Other versions: 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!] Motta, M. & Polo, M., 1999.
"Leniency Programs and Cartel Prosecution ,"
Economics Working Papers
eco99/23, European University Institute.
Hay, George A & Kelley, Daniel, 1974.
"An Empirical Survey of Price Fixing Conspiracies ,"
Journal of Law & Economics ,
University of Chicago Press, vol. 17(1), pages 13-38, April.
Full
references Cited by : (explanations , 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.)
Joseph E. Harrington, Jr, 2005.
"Optimal Corporate Leniency Programs ,"
Economics Working Paper Archive
527, The Johns Hopkins University,Department of Economics.
[Downloadable!]
Gregory Werden, 2008.
"Assessing the Effects of Antitrust Enforcement in the United States ,"
De Economist ,
Springer, vol. 156(4), pages 433-451, December.
[Downloadable!] (restricted)
Jeroen Hinloopen & Adriaan Soetevent, 2006.
"Trust and Recidivism; the Partial Success of Corporate Leniency Program in the Laboratory ,"
Tinbergen Institute Discussion Papers
06-067/1, Tinbergen Institute.
[Downloadable!]
Joseph E. Harrington, Jr, 2006.
"Modelling the Birth and Death of Cartels with an Application to Evaluating Antitrust Policy ,"
Economics Working Paper Archive
532, The Johns Hopkins University,Department of Economics.
[Downloadable!]
Buccirossi, Paolo & Spagnolo, Giancarlo, 2006.
"Optimal Fines in the Era of Whistleblowers ,"
CEPR Discussion Papers
5465, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted)
Ghosal, Vivek, 2006.
"Discovering Cartels: Dynamic Interrelationships between Civil and Criminal Antitrust Investigations ,"
MPRA Paper
5499, University Library of Munich, Germany.
[Downloadable!]
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