On the Design of Leniency Programs
Leniency programs contribute to destabilizing collusion but can also be abused and generate perverse effects. This paper develops a simple model capturing this trade-off, which we use to relate the optimal leniency policy (the carrot) to the effectiveness of investigations (the stick). We show that it is always desirable to offer some leniency before an investigation is launched; it is also optimal to offer some leniency once an investigation is underway when investigations are unlikely to succeed in uncovering cartels, absent self-reporting. Our analysis also confirms the usefulness of restricting leniency to the first informant only; in contrast, it does not support prohibiting leniency for repeat offenders.
(This abstract was borrowed from another version of this item.)
|Date of creation:||Apr 2007|
|Date of revision:||Jan 2012|
|Publication status:||Published in The Journal of Law and Economics, vol. 56, n°4, novembre 2013, p. 917-957.|
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- 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.
- Chen, Zhijun & Rey, Patrick, 2007. "On the Design of Leniency Programs," IDEI Working Papers 452, Institut d'Économie Industrielle (IDEI), Toulouse, revised Jan 2012.
- Steven Shavell & A. Mitchell Polinsky, 2000. "The Economic Theory of Public Enforcement of Law," Journal of Economic Literature, American Economic Association, vol. 38(1), pages 45-76, March.
- A. Mitchell Polinsky & Steven Shavell, 1999. "The Economic Theory of Public Enforcement of Law," NBER Working Papers 6993, National Bureau of Economic Research, Inc.
- Joseph E. Harrington, 2008. "OPTIMAL CORPORATE LENIENCY PROGRAMS -super-," Journal of Industrial Economics, Wiley Blackwell, vol. 56(2), pages 215-246, 06.
- 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.
- Yassine LEFOUILI & Catherine ROUX, 2008. "Leniency Programs for Multimarket Firms: The Effect of Amnesty Plus on Cartel Formation," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 08.05, Université de Lausanne, Faculté des HEC, DEEP.
- LEFOUILI, Yassine & ROUX, Catherine, 2010. "Leniency programs for multimarket firms: The effect of Amnesty Plus on cartel formation," CORE Discussion Papers 2010021, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- 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.
- Cécile Aubert, 2005. "The Impact of Leniency and Whistle-blowing Programs on Cartels," Post-Print hal-00278558, HAL.
- Cécile Aubert & Patrick Rey & William Kovacic, 2006. "The Impact of Leniency and Whistle-blowing Programs on Cartels," Post-Print hal-00151654, HAL.
- Cécile Aubert, 2005. "The Impact of Leniency and Whistle-blowing Programs on Cartels," Post-Print hal-00278581, HAL.
- Motta, Massimo & Polo, Michele, 2003. "Leniency programs and cartel prosecution," International Journal of Industrial Organization, Elsevier, vol. 21(3), pages 347-379, March.
- Massimo Motta & Michele Polo, "undated". "Leniency Programs and Cartel Prosecution," Working Papers 150, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
- Motta, Massimo & Polo, Michele, 2000. "Leniency Programs and Cartel Prosecution," CEPR Discussion Papers 2349, C.E.P.R. Discussion Papers.
- Motta, M. & Polo, M., 1999. "Leniency Programs and Cartel Prosecution," Economics Working Papers eco99/23, European University Institute.
- repec:dau:papers:123456789/13637 is not listed on IDEAS
- Frezal, Sylvestre, 2006. "On optimal cartel deterrence policies," International Journal of Industrial Organization, Elsevier, vol. 24(6), pages 1231-1240, November.
- Jeroen Hinloopen & Adriaan R. Soetevent, 2008. "Laboratory evidence on the effectiveness of corporate leniency programs," RAND Journal of Economics, RAND Corporation, vol. 39(2), pages 607-616.
- 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)
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