Leniency Policies and Cartel Success: An Experiment

Jeong Yeol Kim and Charles Noussair

Review of Industrial Organization, 2023, vol. 63, issue 2, No 4, 187-210

Abstract: Abstract Cartels are often fought by granting leniency, in the form of forgiveness of penalties, to whistle-blowers. This study employs a laboratory experiment to compare leniency programs that differ with respect to fine size and whether a second whistle-blower may apply for leniency. The results show that leniency does not affect the probability that a cartel forms, but is effective in exposing cartels and thereby inhibiting cartel success. Higher fines are more effective, but allowing leniency to a second whistle-blower is no more effective than granting leniency to only one whistle-blower.

Keywords: Antitrust; Cartel; Leniency policy; Experiment (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s11151-023-09915-z

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