Trust, Leniency and Deterrence

Maria Bigoni, Sven-Olof Fridolfsson, Chloe Le Coq and Giancarlo Spagnolo

No 2014:2, Konkurrensverket Working Paper Series in Law and Economics from Konkurrensverket (Swedish Competition Authority)

Abstract: This paper presents results from a laboratory experiment studying the channels through which di erent law enforcement strategies deter cartel formation. With leniency policies o ering immunity to the rst reporting party, a high ne is the main determinant of deterrence, having a strong e ect even when the probability of exogenous detection is zero. Deterrence appears to be mainly driven by `distrust'; here, the fear of partners deviating and reporting. Absent leniency, the probability of detection and the expected ne matter more, and low nes are exploited to punish defections. The results appear relevant to several other forms of crimes that share cartels' strategic features, including corruption and nancial fraud.

Keywords: Antitrust; Betrayal; Cartels; Collusion; Distrust; Fines; Leniency; Whistleblowers (search for similar items in EconPapers)
JEL-codes: C92 D03 K21 K42 L41 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2014-09-18
New Economics Papers: this item is included in nep-com, nep-exp and nep-law
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Trust, Leniency, and Deterrence (2015)
Working Paper: Trust, Leniency and Deterrence (2014)
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