Economics at your fingertips  

Criminal Networks, Market Externalities and Optimal Leniency

Giovanni Immordino (), Salvatore Piccolo () and Paolo Roberti ()
Additional contact information
Salvatore Piccolo: Università di Bergamo and CSEF

CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy

Abstract: We analyze the relationship between competition and self-reporting incentives within a criminal network formed by a supplier of an illegal good and two dealers distributing the good to final consumers. The Legislator designs a leniency program to deter crime. We show that the comparison between the optimal amnesty with competition and monopoly in the dealership market depends on the strength of the externalities between dealers at the reporting stage. While in monopoly a leniency program is al- ways feasible, the opposite may happen with competition. This impossibility result is more relevant when the demand for the illegal product is large, when the market is neither too competitive nor too concentrated and when dealers know too much about each other. Moreover, in contrast to monopoly, the policy does not necessarily increase welfare in a competitive environment.

Keywords: Accomplice-witnesses; Criminal Organizations; Leniency; Whistle-Blower (search for similar items in EconPapers)
Date: 2018-12-14
New Economics Papers: this item is included in nep-com, nep-law, nep-mic and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Forthcoming in Journal of Public Economics

Downloads: (external link) (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this paper

More papers in CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy Contact information at EDIRC.
Bibliographic data for series maintained by Lia Ambrosio ().

Page updated 2020-12-03
Handle: RePEc:sef:csefwp:519