Should "What is Done by Night Appear by Day"? An Optimal Design of the Leniency Program to Investigate Collusion

Guzel Yusupova () and Evgeniy Nesterenko

Public administration issues, 2016, issue 3, 91-120

Abstract: Recent trends in the regulation of antitrust legislation have shown that it is necessary to review the policy on the method of cartel deterrence. First of all, it is connected with the strengthening of the world tendency to collusion at different markets, so new mechanisms are periodically introduced to keep up antitrust law in Russia. The article presents a game-theoretic model of strategic interaction of market participants in the conditions of information asymmetry, firms of collusion and an antimonopoly authority including. In various parameters of the leniency program, market conditions, actions of the antimonopoly authority participants of collusion make a decision about their strategy (to collude, to collude but to cooperate, or not to collude). This model shows that the methods of the antimonopoly authority can be justified if, it uses the factor of uncertainty and riskaverse by collusion participants to increase the incentives of participants not to collude.The model results made it possible to formulate recommendations on improving the design of leniency program in Russia. The following tasks, among others, are singled out as the tasks of first priority: the raise of the maximum penalty, progressive discount decrease to the second and every next collusion participant who confesses, as it is FAS of Russia that has had these powers since the beginning of 2016.

Keywords: leniency program; collusion; antitrust regulation; fines; asymmetric information; antimonopoly authority (search for similar items in EconPapers)
Date: 2016
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