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Optimal Leniency Programs When Firms Have Cumulative and Asymmetric Evidence

Marc Blatter (), Winand Emons () and Silvio Sticher ()
Additional contact information
Marc Blatter: Universität Bern, Swiss National Bank
Silvio Sticher: Swiss Federal Railways

Review of Industrial Organization, 2018, vol. 52, issue 3, 403-427

Abstract: Abstract An antitrust authority deters collusion with the use of fines and a leniency program. Firms have imperfect cumulative evidence of the collusion. That is, cartel conviction is not automatic if one firm reports. Reporting makes conviction only more likely: the more that firms report, the more likely is conviction. Furthermore, the evidence is distributed asymmetrically among firms. This set-up allows us meaningfully to analyze three typical features of leniency programs: minimum-evidence standards; ringleader discrimination; and marker systems. Minimum-evidence standards provide high-evidence firms with proper incentives to report. They are better at deterring than is ringleader discrimination. Under a marker system only one firm reports so that the antitrust authority never gets the entire available evidence. Appropriate minimum-evidence standards make a marker system redundant.

Keywords: Antitrust; Cartels; Deterrence; Leniency; Evidence (search for similar items in EconPapers)
JEL-codes: D43 K21 K42 L40 (search for similar items in EconPapers)
Date: 2018
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Related works:
Working Paper: Optimal Leniency Programs when Firms Have Cumulative and Asymmetric Evidence (2014) Downloads
Working Paper: Optimal Leniency Programs when Firms Have Cumulative and Asymmetric Evidence (2014) Downloads
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