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The EU Leniency Programme and Recidivism

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Abstract

The EU Leniency Programme (LP) aims to encourage the dissolution of existing cartels and the deterrence of future cartels, through spontaneous reporting and/or significant cooperation by cartel members during an investigation. However, the European Commission guidelines are rather vague in terms of the factors that influence the granting and scale of fine reductions. As expected, the results shown that the first reporting or cooperating firm receives generous fine reductions. More importantly, there is some evidence that firms can “learn how to play the leniency game”, either learning how to cheat or how to report, as the reductions given to multiple o ffenders (and their cartel partners) are substantially higher. These results have an ambiguous impact on firms’ incentives and major implications for policy making.

Suggested Citation

  • Marvao, Catarina, 2014. "The EU Leniency Programme and Recidivism," SITE Working Paper Series 27, Stockholm School of Economics, Stockholm Institute of Transition Economics.
  • Handle: RePEc:hhs:hasite:0027
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    References listed on IDEAS

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    1. 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.
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    3. Gärtner, D.L. & Zhou, J., 2012. "Delays in Leniency Application : Is There Really a Race to the Enforcer’s Door?," Discussion Paper 2012-044, Tilburg University, Tilburg Law and Economic Center.
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    7. John M. Connor, 2010. "Recidivism Revealed: Private International Cartels 1990-2009," CPI Journal, Competition Policy International, vol. 6.
    8. Gärtner, Dennis L. & Zhou, Jun, 2012. "Delays in Leniency Application: Is There Really a Race to the Enforcer's Door?," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 395, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
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    Cited by:

    1. Hoang, Cung Truong & Hüschelrath, Kai & Laitenberger, Ulrich & Smuda, Florian, 2014. "Determinants of self-reporting under the European corporate leniency program," International Review of Law and Economics, Elsevier, vol. 40(C), pages 15-23.
    2. Auriol, Emmanuelle & Søreide, Tina, 2017. "An economic analysis of debarment," International Review of Law and Economics, Elsevier, vol. 50(C), pages 36-49.
    3. Robert M. Feinberg, 2016. "Cartel Stability: Determinants and International Evidence," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 48(4), pages 357-359, June.
    4. 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.

    More about this item

    Keywords

    Cartels; competition policy; Leniency Programme; self-reporting;

    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
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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