Leniency programs for multimarket firms: The effect of Amnesty Plus on cartel formation

Yassine Lefouili and Catherine Roux

International Journal of Industrial Organization, 2012, vol. 30, issue 6, 624-640

Abstract: We examine the effect of Amnesty Plus on dynamic cartel formation in a multimarket setting. The Amnesty Plus program has been adopted as part of the US Corporate Leniency Policy in 1999 and is now vigorously advertised as one of the most compelling tools in generating successful cartel investigations. Amnesty Plus is aimed at attracting amnesty applications by encouraging firms, convicted in one market, to report their collusive agreements in other markets. We show that Amnesty Plus has two opposite effects on firms' ability and incentives to collude which are both increasing in the fine reduction granted. First, Amnesty Plus can reduce the deterrence of cartel activities by making it easier for firms to sustain multimarket collusion through strategies involving self-reporting after a first cartel detection. Second, it can reduce the expected duration of cartels or delay their formation by increasing firms' incentives to self-report after a first cartel detection.

Keywords: Collusion; Amnesty Plus; Multimarket contact; Leniency program (search for similar items in EconPapers)
JEL-codes: K21 K42 L41 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

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Related works:
Working Paper: Leniency programs for multimarket firms: The effect of Amnesty Plus on cartel formation (2010)
Working Paper: Leniency Programs for Multimarket Firms: The Effect of Amnesty Plus on Cartel Formation (2008)
Working Paper: Leniency Programs for Multimarket Firms: The Effect of Amnesty Plus on Cartel Formation (2008)
Working Paper: Leniency Programs for Multimarket Firms: The Effect of Amnesty Plus on Cartel Formation (2008)
Working Paper: Leniency Programs for Multimarket Firms: The Effect of Amnesty Plus on Cartel Formation (2008)
Working Paper: Leniency Programs for Multimarket Firms: The Effect of Amnesty Plus on Cartel Formation (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:30:y:2012:i:6:p:624-640

DOI: 10.1016/j.ijindorg.2012.04.004

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