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Optimal Leniency Programs when Firms Have Cumulative and Asymmetric Evidence

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  • Marc Blatter
  • Winand Emons
  • Silvio Sticher

Abstract

An antitrust authority deters collusion using fines and a leniency program. Unlike in most of the earlier literature, our firms have imperfect cumulative evidence of the collusion. That is, cartel conviction is not automatic if one firm reports: reporting makes conviction only more likely, the more so, the more firms report. Furthermore, the evidence is distributed asymmetrically among firms. Asymmetry of the evidence can increase the cost of deterrence if the high-evidence firm chooses to remain silent. Minimum-evidence standards may counteract this effect. Under a marker system only one firm reports; this may increase the cost of deterrence.

Suggested Citation

  • Marc Blatter & Winand Emons & Silvio Sticher, 2014. "Optimal Leniency Programs when Firms Have Cumulative and Asymmetric Evidence," Diskussionsschriften dp1405, Universitaet Bern, Departement Volkswirtschaft.
    • Handle: RePEc:ube:dpvwib:dp1405
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    References listed on IDEAS

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    Cited by:

    1. Emons, Winand, 2020. "The effectiveness of leniency programs when firms choose the degree of collusion," International Journal of Industrial Organization, Elsevier, vol. 70(C).
    2. Hannes Wallimann & Silvio Sticher, 2023. "On suspicious tracks: machine-learning based approaches to detect cartels in railway-infrastructure procurement," Papers 2304.11888, arXiv.org.
    3. Konstantinos Charistos, 2022. "Ringleader Discrimination in Leniency Policies," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 61(3), pages 297-315, November.
    4. Catarina Marvão & Giancarlo Spagnolo, 2018. "Cartels and leniency: Taking stock of what we learnt," Chapters, in: Luis C. Corchón & Marco A. Marini (ed.), Handbook of Game Theory and Industrial Organization, Volume II, chapter 4, pages 57-90, Edward Elgar Publishing.
    5. Ruben Korsten & Andrew Samuel, 2023. "Cartel formation and detection: the role of information costs and disclosure," European Journal of Law and Economics, Springer, vol. 56(1), pages 117-153, August.
    6. Isogai, Shigeki & Shen, Chaohai, 2023. "Multiproduct firm’s reputation and leniency program in multimarket collusion," Economic Modelling, Elsevier, vol. 125(C).
    7. Karine Brisset & Francois Cochard & Eve-Angeline Lambert, 2023. "Is Amnesty Plus More Successful in Fighting Multimarket Cartels? An Exploratory Analysis," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 63(2), pages 211-237, September.
    8. Peter T. Dijkstra & Jacob Seifert, 2023. "Cartel Leniency and Settlements: A Joint Perspective," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 63(2), pages 239-273, September.
    9. Joseph E. Harrington Jr. & Myong-Hun Chang, 2015. "When Can We Expect a Corporate Leniency Program to Result in Fewer Cartels?," Journal of Law and Economics, University of Chicago Press, vol. 58(2), pages 417-449.

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    More about this item

    Keywords

    antitrust; cartels; deterrence; leniency; evidence;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General

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