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Cartel destabilization and leniency programs: Empirical evidence

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  • Klein, Gordon J.

Abstract

Leniency programs as a tool for cartel detection and cartel destabilization, have been implemented since the early nineties. Theoretical work has shown that leniency programs can be effective in enhancing cartel detection and deterrence, but these effects are not straight-forward. It is even possible that there is an increase in the total number of cartels. Empirical evidence shows that the positive effect on cartel deterrence seems to dominate, but cannot provide definite evidence, as inference is derived only by detected cartels. This study uses a more direct measure of success, the intensity of competition at the industry level of OECD countries. An instrumental variable approach, reveals a positive effect on industries' competition intensity of leniency programs indicating effectiveness in cartel destabilization and effective deterrence.

Suggested Citation

  • Klein, Gordon J., 2010. "Cartel destabilization and leniency programs: Empirical evidence," ZEW Discussion Papers 10-107, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:10107
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    1. Andrei Shleifer & Florencio Lopez-de-Silanes & Rafael La Porta, 2008. "The Economic Consequences of Legal Origins," Journal of Economic Literature, American Economic Association, vol. 46(2), pages 285-332, June.
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    Cited by:

    1. Stéphanie Boulenger & Marcelin Joanis, 2015. "Analyse économique des marchés publics dans l’industrie de la construction au Québec," CIRANO Project Reports 2015rp-23, CIRANO.
    2. Shastitko, Andrey Ye. (Шаститко, Андрей) & Pavlova, Natalia S. (Павлова, Наталья), 2018. "Wide Prospects and Ravines of Competition Policy [Широкие Перспективы И Овраги Конкурентной Политики]," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 5, pages 110-133, October.
    3. Dennis Sánchez Navarro, 2013. "Eficacia y asimetrías de los programas de delación en un contexto multimercado: un análisis del caso colombiano en el marco del TLC con Estados Unidos," Estudios Económicos SIC 10905, Superintendencia de Industria y Comercio.
    4. Yusupova, Guzel', 2013. "The program of exemption from punishment in antitrust policy: empirical assessment of the problem," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, pages 143-160, December.
    5. Catarina Marvão, 2016. "The EU Leniency Programme and Recidivism," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 48(1), pages 1-27, February.
    6. 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.
    7. Catarina Marvão, 2016. "The EU Leniency Programme and Recidivism," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 48(1), pages 1-27, February.
    8. Gyuzel Yusupova, 2013. "Leniency program and cartel deterrence in Russia: effects assessment," HSE Working papers WP BRP 06/PA/2013, National Research University Higher School of Economics.
    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.
    10. Tebbe, Eva, 2018. "Once bitten, twice shy? Market size affects the effectiveness of a leniency program by (de-)activating hysteresis effects," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168304, Verein für Socialpolitik / German Economic Association, revised 2018.
    11. Joan-Ramon Borrell & Carmen García & Juan Luis Jiménez & José Manuel Ordóñez-de-Haro, 2022. ""Cartel destabilization effect of leniency programs"," IREA Working Papers 202213, University of Barcelona, Research Institute of Applied Economics, revised Sep 2022.
    12. Panayiotis Agisilaou, 2013. "Collusion in Industrial Economics and Optimally Designed Leniency Programmes - A Survey," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2013-03, Centre for Competition Policy, University of East Anglia, Norwich, UK..
    13. Klein, Gordon J. & Günster, Andrea, 2013. "Enforcement of European Competition Policy - Impact on Competition and Efficiency," VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79989, Verein für Socialpolitik / German Economic Association.
    14. Sánchez Navarro, Dennis, 2013. "Eficacia y asimetrías de los programas de delación en un contexto multi-mercado: un análisis del caso colombiano en el marco del TLC con Estados Unidos [Efficacy and asymmetries of the leniency pro," MPRA Paper 48699, University Library of Munich, Germany.

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    More about this item

    Keywords

    Cartel; Antitrust; Leniency Program;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • 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
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices

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