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Delays in Leniency Application: Is There Really a Race to the Enforcer's Door?

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  • Gärtner, Dennis L.
  • Zhou, Jun

Abstract

This paper studies cartels’ strategic behavior in delaying leniency applications, a take-up decision that has been ignored in the previous literature. Using European Commission decisions issued over a 16-year span, we show, contrary to common beliefs and the existing literature, that conspirators often apply for leniency long after a cartel collapses. We estimate hazard and probit models to study the determinants of leniency-application delays. Statistical tests find that delays are symmetrically affected by antitrust policies and macroeconomic fluctuations. Our results shed light on the design of enforcement programs against cartels and other forms of conspiracy.

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Bibliographic Info

Paper provided by Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich in its series Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems with number 395.

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Date of creation: Dec 2012
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Handle: RePEc:trf:wpaper:395

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Keywords: corporate leniency program; cartel; leniency application delays;

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  1. Joseph E. Harrington, Jr, 2006. "How Do Cartels Operate?," Economics Working Paper Archive, The Johns Hopkins University,Department of Economics 531, The Johns Hopkins University,Department of Economics.
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  3. Harrington, Joseph E., 2006. "How Do Cartels Operate?," Foundations and Trends(R) in Microeconomics, now publishers, now publishers, vol. 2(1), pages 1-105, August.
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  13. Jacquemin, Alexis & Nambu, Tsuruhiko & Dewez, Isabelle, 1981. "A Dynamic Analysis of Export Cartels: The Japanese Case," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 91(363), pages 685-96, September.
  14. Joseph E. Harrington & Myong-Hun Chang, 2009. "Modeling the Birth and Death of Cartels with an Application to Evaluating Competition Policy," Journal of the European Economic Association, MIT Press, MIT Press, vol. 7(6), pages 1400-1435, December.
  15. Rey, Patrick, 2002. "Towards a Theory of Competition Policy," IDEI Working Papers, Institut d'Économie Industrielle (IDEI), Toulouse 121, Institut d'Économie Industrielle (IDEI), Toulouse.
  16. Myong-Hun Chang & Joseph E. Harrington, Jr., 2008. "The Impact of a Corporate Leniency Program on Antitrust Enforcement and Cartelization," Economics Working Paper Archive, The Johns Hopkins University,Department of Economics 548, The Johns Hopkins University,Department of Economics.
  17. Joseph E. Harrington, Jr. & Andrzej Skrzypacz, 2009. "Private Monitoring and Communication in Cartels: Explaining Recent Collusive Practices," Economics Working Paper Archive, The Johns Hopkins University,Department of Economics 555, The Johns Hopkins University,Department of Economics.
  18. Margaret C. Levenstein & Valerie Y. Suslow, 2011. "Breaking Up Is Hard to Do: Determinants of Cartel Duration," Journal of Law and Economics, University of Chicago Press, University of Chicago Press, vol. 54(2), pages 455 - 492.
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  20. Ghosal, Vivek & Gallo, Joseph, 2001. "The cyclical behavior of the Department of Justice's antitrust enforcement activity," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 19(1-2), pages 27-54, January.
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Cited by:
  1. Hoang, Cung Truong & Hüschelrath, Kai & Laitenberger, Ulrich & Smuda, Florian, 2014. "Determinants of self-reporting under the European corporate leniency program," ZEW Discussion Papers, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research 14-043, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.

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