Ringleader Discrimination in Leniency Policies

Konstantinos Charistos ()
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Konstantinos Charistos: University of Macedonia

Review of Industrial Organization, 2022, vol. 61, issue 3, No 3, 297-315

Abstract: Abstract This paper studies whether excluding the cartel ringleader from “leniency programs” (LPs) hinders collusion. The ringleader’s exclusion from any leniency right: (a) destabilizes cartels by creating asymmetry in the partners’ collusive payoffs; and (b) fosters cartel activity by reducing the ringleader’s payoff from deviation. The discriminatory LP can increase the ringleader’s credibility as loyal partner and weaken firms’ incentive to deviate. A partially discriminatory LP that allows the ringleader to receive leniency only when it denounces a cartel that is not under investigation but not when cooperating in an already launched investigation eliminates (b). By restoring the ringleader’s payoff from deviation at its non-discriminatory level, partial discrimination is more effective in destabilizing collusion compared to both, full- and non-discrimination.

Keywords: Antitrust enforcement; Collusion; Leniency programs; Ringleader discrimination (search for similar items in EconPapers)
JEL-codes: K21 L12 L41 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s11151-022-09875-w

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