IDEAS home Printed from https://ideas.repec.org/p/gat/wpaper/1524.html
   My bibliography  Save this paper

Endogenous firms’ organization, internal audit and leniency programs

Author

Listed:
  • Emilie Dargaud

    (Université de Lyon, Lyon, F-69007, France ; CNRS, GATE Lyon St Etienne,F-69130 Ecully, France)

  • Armel Jacques

    (CEMOI, Université de La Réunion, Faculté de Droit et d'Economie, 15, avenue René Cassin, 97715 Saint-Denis cedex 9)

Abstract

When multi-product firms make simultaneous price-fixing agreements on different markets, they may wish to compartmentalize their agreements managing them with different individuals in order to avoid the contagion of antitrust authority investigations. Sometimes the leniency programs are effcient to defeat this strategy and to induce CEO to launch internal investigations and report the obtained hard evidence to the antitrust authority. However these programs may have pro-collusive effects for centralized firms.

Suggested Citation

  • Emilie Dargaud & Armel Jacques, 2015. "Endogenous firms’ organization, internal audit and leniency programs," Working Papers 1524, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
    • Handle: RePEc:gat:wpaper:1524
    as

    Download full text from publisher

    File URL: ftp://ftp.gate.cnrs.fr/RePEc/2012/1524.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Emilie Dargaud & Armel Jacques, 2015. "Hidden collusion by decentralization: firm organization and antitrust policy," Journal of Economics, Springer, vol. 114(2), pages 153-176, March.
    2. Joseph E. Harrington, 2005. "Optimal Cartel Pricing In The Presence Of An Antitrust Authority," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 46(1), pages 145-169, February.
    3. Lefouili, Yassine & Roux, Catherine, 2012. "Leniency programs for multimarket firms: The effect of Amnesty Plus on cartel formation," International Journal of Industrial Organization, Elsevier, vol. 30(6), pages 624-640.
    4. Julien Sauvagnat, 2015. "Prosecution and Leniency Programs: The Role of Bluffing in Opening Investigations," Journal of Industrial Economics, Wiley Blackwell, vol. 63(2), pages 313-338, June.
    5. Motta, Massimo & Polo, Michele, 2003. "Leniency programs and cartel prosecution," International Journal of Industrial Organization, Elsevier, vol. 21(3), pages 347-379, March.
    6. Joseph E. Harrington, Jr., 2004. "Cartel Pricing Dynamics in the Presence of an Antitrust Authority," RAND Journal of Economics, The RAND Corporation, vol. 35(4), pages 651-673, Winter.
    7. repec:dau:papers:123456789/13637 is not listed on IDEAS
    8. Catherine Roux & Thomas von Ungern-Sternberg, 2007. "Leniency Programs in a Multimarket Setting: Amnesty Plus and Penalty Plus," CESifo Working Paper Series 1995, CESifo.
    9. Mariagiovanna Baccara & Heski Bar-Isaac, 2008. "How to Organize Crime -super-1," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 75(4), pages 1039-1067.
    10. Garoupa, Nuno, 2007. "Optimal law enforcement and criminal organization," Journal of Economic Behavior & Organization, Elsevier, vol. 63(3), pages 461-474, July.
    11. Souam, Said, 2001. "Optimal antitrust policy under different regimes of fines," International Journal of Industrial Organization, Elsevier, vol. 19(1-2), pages 1-26, January.
    12. Joseph E. Harrington, Jr, 2011. "When is an antitrust authority not aggressive enough in fighting cartels?," International Journal of Economic Theory, The International Society for Economic Theory, vol. 7(1), pages 39-50, March.
    13. Joseph E. Harrington, 2008. "Optimal Corporate Leniency Programs," Journal of Industrial Economics, Wiley Blackwell, vol. 56(2), pages 215-246, June.
    14. Christopher M. Snyder, 1996. "A Dynamic Theory of Countervailing Power," RAND Journal of Economics, The RAND Corporation, vol. 27(4), pages 747-769, Winter.
    15. Aubert, Cecile & Rey, Patrick & Kovacic, William E., 2006. "The impact of leniency and whistle-blowing programs on cartels," International Journal of Industrial Organization, Elsevier, vol. 24(6), pages 1241-1266, November.
    16. Heski Bar-Isaac & Mariagiovanna Baccara, 2006. "How to Organize Crime," Working Papers 06-07, New York University, Leonard N. Stern School of Business, Department of Economics.
    17. Joseph E. Harrington Jr, 2013. "Corporate Leniency Programs when Firms have Private Information: The Push of Prosecution and the Pull of Pre-emption," Journal of Industrial Economics, Wiley Blackwell, vol. 61(1), pages 1-27, March.
    18. Houba, Harold & Motchenkova, Evgenia & Wen, Quan, 2012. "Competitive prices as optimal cartel prices," Economics Letters, Elsevier, vol. 114(1), pages 39-42.
    19. Jay Pil Choi & Heiko Gerlach, 2013. "Multi-Market Collusion with Demand Linkages and Antitrust Enforcement," Journal of Industrial Economics, Wiley Blackwell, vol. 61(4), pages 987-1022, December.
    20. Nathan H. Miller, 2009. "Strategic Leniency and Cartel Enforcement," American Economic Review, American Economic Association, vol. 99(3), pages 750-768, June.
    21. Brenner, Steffen, 2009. "An empirical study of the European corporate leniency program," International Journal of Industrial Organization, Elsevier, vol. 27(6), pages 639-645, November.
    22. 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.
    23. Sauvagnat, Julien, 2014. "Are leniency programs too generous?," Economics Letters, Elsevier, vol. 123(3), pages 323-326.
    24. Nicola Persico, 2002. "Racial Profiling, Fairness, and Effectiveness of Policing," American Economic Review, American Economic Association, vol. 92(5), pages 1472-1497, December.
    25. Sauvagnat, Julien, 2010. "Prosecution and Leniency Programs: a Fool's Game," TSE Working Papers 10-188, Toulouse School of Economics (TSE).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. 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.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Emilie Dargaud & Armel Jacques, 2020. "Slowdown antitrust investigations by decentralization," Working Papers halshs-02613352, HAL.
    2. Emons, Winand, 2020. "The effectiveness of leniency programs when firms choose the degree of collusion," International Journal of Industrial Organization, Elsevier, vol. 70(C).
    3. Isogai, Shigeki & Shen, Chaohai, 2023. "Multiproduct firm’s reputation and leniency program in multimarket collusion," Economic Modelling, Elsevier, vol. 125(C).
    4. Jun Zhou, 2016. "The dynamics of leniency application and the knock-on effect of cartel enforcement," Working Papers 13042, Bruegel.
    5. 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.
    6. 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.
    7. 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.
    8. Emilie Dargaud & Armel Jacques, 2015. "Hidden collusion by decentralization: firm organization and antitrust policy," Journal of Economics, Springer, vol. 114(2), pages 153-176, March.
    9. 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.
    10. Marc Blatter & Winand Emons & Silvio Sticher, 2018. "Optimal Leniency Programs When Firms Have Cumulative and Asymmetric Evidence," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 52(3), pages 403-427, May.
    11. 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..
    12. Lefouili, Yassine & Roux, Catherine, 2012. "Leniency programs for multimarket firms: The effect of Amnesty Plus on cartel formation," International Journal of Industrial Organization, Elsevier, vol. 30(6), pages 624-640.
    13. Maria Bigoni & Sven-Olof Fridolfsson & Chloé Le Coq & Giancarlo Spagnolo, 2015. "Trust, Leniency, and Deterrence," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 31(4), pages 663-689.
    14. 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.
    15. Gamba, Astrid & Immordino, Giovanni & Piccolo, Salvatore, 2018. "Corruption, organized crime and the bright side of subversion of law," Journal of Public Economics, Elsevier, vol. 159(C), pages 79-88.
    16. Giovanni Immordino & Salvatore Piccolo & Paolo Roberti, 2018. "Optimal Leniency and the Organization Design of Group Delinquency," CSEF Working Papers 503, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    17. Immordino, Giovanni & Piccolo, Salvatore & Roberti, Paolo, 2020. "Optimal leniency and the organization design of group crime," Journal of Public Economics, Elsevier, vol. 191(C).
    18. Giovanni Immordino & Salvatore Piccolo & Paolo Roberti, 2018. "Criminal Networks, Market Externalities and Optimal Leniency," CSEF Working Papers 519, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    19. Jay Pil Choi & Heiko Gerlach, 2013. "Multi-Market Collusion with Demand Linkages and Antitrust Enforcement," Journal of Industrial Economics, Wiley Blackwell, vol. 61(4), pages 987-1022, December.
    20. 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.

    More about this item

    Keywords

    Collusion; antitrust policy; leniency programs; multimarket contact; organizational form;
    All these keywords.

    JEL classification:

    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gat:wpaper:1524. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Nelly Wirth (email available below). General contact details of provider: https://edirc.repec.org/data/gateefr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.