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Leniency programs for multimarket firms: The effect of Amnesty Plus on cartel formation

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  • LEFOUILI, Yassine

    (Center for Operations Research and Econometrics (CORE), Université catholique de Louvain (UCL), Louvain la Neuve, Belgium)

  • ROUX, Catherine

    (University of Lausanne, Faculty of Business and Economics, CH-1015 Lausanne-Dorigny, Switzerland)

Abstract

We examine the effect of the Amnesty Plus policy on the incentives of firms to engage in cartel activities. Amnesty Plus is aimed at attracting amnesty applications by encouraging firms, convicted in one market, to report their collusive agreements in other markets. It has been vigorously advertised that Amnesty Plus weakens cartel stability. We show to the contrary that Amnesty Plus may not have this desirable effect, and, if improperly designed, may even stabilize a cartel. We suggest a simple discount-setting rule to avoid this anticompetitive effect.

Suggested Citation

  • LEFOUILI, Yassine & ROUX, Catherine, 2010. "Leniency programs for multimarket firms: The effect of Amnesty Plus on cartel formation," LIDAM Discussion Papers CORE 2010021, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  • Handle: RePEc:cor:louvco:2010021
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    Cited by:

    1. Natalia Pavlova & Andrey Shastitko, 2014. "Effects Of Hostility Tradition In Antitrust: Leniency Programs And Cooperation Agreements," HSE Working papers WP BRP 58/EC/2014, National Research University Higher School of Economics.
    2. Jay Pil Choi & Heiko Gerlach, 2012. "International Antitrust Enforcement And Multimarket Contact," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 53(2), pages 635-658, May.
    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 010905, Superintendencia de Industria y Comercio.
    4. Zhijun Chen & Patrick Rey, 2013. "On the Design of Leniency Programs," Journal of Law and Economics, University of Chicago Press, vol. 56(4), pages 917-957.
    5. Pavlova, Natalia & Shastitko, Andrey, 2016. "Leniency programs and socially beneficial cooperation: Effects of type I errors," Russian Journal of Economics, Elsevier, vol. 2(4), pages 375-401.
    6. Emilie Dargaud & Armel Jacques, 2020. "Slowdown antitrust investigations by decentralization," Working Papers 2017, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
    7. Emilie Dargaud & Armel Jacques, 2020. "Slowdown antitrust investigations by decentralization," Working Papers halshs-02613352, HAL.
    8. Choi, Jay Pil & Gerlach, Heiko, 2012. "Global cartels, leniency programs and international antitrust cooperation," International Journal of Industrial Organization, Elsevier, vol. 30(6), pages 528-540.
    9. Jun Zhou, 2016. "The Rise and Fall of Cartels with Multi-market Colluders," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 48(4), pages 381-403, June.
    10. Houba Harold & Motchenkova Evgenia & Wen Quan, 2015. "The Effects of Leniency on Cartel Pricing," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 15(2), pages 351-389, July.
    11. 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.
    12. Emilie Dargaud & Armel Jacques, 2020. "Slowdown antitrust investigations by decentralization," TEPP Working Paper 2020-05, TEPP.
    13. Emilie Dargaud & Armel Jacques, 2015. "Endogenous firms' organization, internal audit and leniency programs," Working Papers halshs-01199268, HAL.
    14. Jun Zhou, 2016. "The dynamics of leniency application and the knock-on effect of cartel enforcement," Working Papers 13042, Bruegel.
    15. Andrey V. Makarov, 2014. "Comparative Analusis Of Antitrust Policy Against Collusion In Some Transition Economies: Challenges For Effectiveness," HSE Working papers WP BRP 20/PA/2014, National Research University Higher School of Economics.
    16. 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.
    17. Leslie M. Marx & Claudio Mezzetti & Robert C. Marshall, 2015. "Antitrust Leniency with Multiproduct Colluders," American Economic Journal: Microeconomics, American Economic Association, vol. 7(3), pages 205-240, August.

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    More about this item

    Keywords

    Amnesty Plus; Leniency program; multimarket contact; antitrust policy;
    All these keywords.

    JEL classification:

    • 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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