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Blowing the Whistle

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  • Jose Apesteguia
  • Martin Dufwenberg
  • Reinhard Selten

Abstract

Leniency clauses, offering cartelists legal immunity if they blow the whistle on each other, is a recent anti-trust innovation. The authorities wish to thwart cartels and promote competition. This effect is not evident, however; whistle-blowing may enforce trust and collusion by providing a tool for cartelists to punish each other. We examine the impact of leniency law, and other rules, theoretically and experimentally.
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Suggested Citation

  • Jose Apesteguia & Martin Dufwenberg & Reinhard Selten, 2007. "Blowing the Whistle," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 31(1), pages 143-166, April.
    • Handle: RePEc:spr:joecth:v:31:y:2007:i:1:p:143-166
    DOI: 10.1007/s00199-006-0092-8
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    More about this item

    Keywords

    Anti-trust; Leniency; Immunity; Amnesty; Blow the whistle; Cartels; Price competition; Bertrand model; Experiment communication; C92; D43; L13;
    All these keywords.

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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