On leniency and markers in antitrust: how many informants are enough?

Konstantinos Charistos () and Christos Constantatos
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Konstantinos Charistos: Department of Economics, University of Macedonia

Discussion Paper Series from Department of Economics, University of Macedonia

Abstract: In this paper we investigate the impact of leniency programs on firms’ decision to collude. We depart from previous literature by relaxing the assumption that evidence provided by a single firm suffices to convict an existing cartel with certainty. Assuming the conviction-probability to be increasing in the number of reporting firms, we show first that efficient cartel deterrence requires incentives for all firms to report. Under a regime that secures a marker for the first in line applicant, eligibility for leniency should be extended to at least a second informant. Further, we show that the introduction of the marker system has an ambiguous impact on cartel deterrence. In relation to the manner that the marker is secured and the cartel-related evidence is allocated, we derive the conditions under which allowing the first applicant to secure a marker enhances cartel deterrence.

Keywords: antitrust enforcement; collusion; leniency programs. (search for similar items in EconPapers)
JEL-codes: K21 L12 L41 (search for similar items in EconPapers)
Date: 2016-11, Revised 2016-11
New Economics Papers: this item is included in nep-com, nep-ind and nep-law
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Citations: View citations in EconPapers (1)

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