Maximal Cartel Pricing and Leniency Programs

Harold Houba, Evgenia Motchenkova and Quan Wen ()

No 08-120/1, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: For a general class of oligopoly models with price competition, we analyze the impact of ex-ante leniency programs in antitrust regulation on the endogenous maximal-sustainable cartel price. This impact depends upon industry characteristics including its cartel culture. Our analysis disentangles the effects of traditional antitrust regulation and the leniency program. Ex-ante leniency programs are effective if and only if these offer substantial rewards to the self-reporting firm. This is in contrast to currently employed programs that are therefore ineffective.

Keywords: Cartel; Antitrust Policy; Antitrust Law; Antitrust regulation; Leniency program; Self-reporting; repeated game (search for similar items in EconPapers)
JEL-codes: C72 K21 L41 (search for similar items in EconPapers)
Date: 2008-12-17
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:tin:wpaper:20080120

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