Prosecution and Leniency Programs: a Fool's Game

Julien Sauvagnat

No 10-188, TSE Working Papers from Toulouse School of Economics (TSE)

Abstract: We present a model where the Antitrust Authority is privately informed about the strength of the case against a given cartel. In this context, the Antitrust Authority may obtain cartel members' confessions even when it opens an investigation knowing that it has no chance to find hard evidence. More generally, we show that offering leniency allows to raise the conviction rate, which in turn enhances cartel desistance and cartel deterrence. A second contribution of the paper is to show that the optimal leniency scheme involves a single informant rule. That is, amnesty should be given only if a unique cartel member reports information.

Keywords: Antitrust law and policy; Cartels; Collusion; Self-reporting (search for similar items in EconPapers)
JEL-codes: K21 K42 L41 (search for similar items in EconPapers)
Date: 2010-09
New Economics Papers: this item is included in nep-com, nep-cta, nep-ind, nep-law and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:tse:wpaper:23201

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