On the Design of Leniency Programs

Chen, Zhijun; Rey, Patrick

doi:10.1086/674011

Cited by 108 publications

(83 citation statements)

References 13 publications

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“…This is for instance found in the works of Harrington (2008), Spagnolo (2008) as well as in Chen and Rey (2012). They all show that letting leniency be limited to the …rst informant maximizes the program's impact when it comes to destabilizing the cartel.…”

Section: Relation To the Literaturementioning

confidence: 84%

Crime and Punishment: When Tougher Antitrust Enforcement Leads to Higher Overcharge

et al. 2013

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The economics of crime and punishment postulates that higher punishment leads to lower crime levels, or less severe crime. It is however hard to get empirical support for this intuitive relationship.This paper o¤ers a model that contributes to explain why this is the case. We show that if criminals can spend resources to reduce the probability of being detected, then a higher general punishment level can increase the crime level. In the context of antitrust enforcement, it is shown that competition authorities who attempt to …ght cartels by means of tougher sanctions for all o¤enders may actually lead cartels to increase their overcharge when leniency programs are in place.

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Section: Relation To the Literaturementioning

confidence: 84%

Crime and Punishment: When Tougher Antitrust Enforcement Leads to Higher Overcharge

et al. 2013

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“…Similar to the present article, for instance, Motta and Polo (2003), Chen and Rey (2007) use a …xed probability of inspection, 1 but in a leniency program context. Speci…cally, they study the antitrust enforcement under leniency programs and analyze the incentives to collude when the probability of detection and penalties are both …xed.…”

Section: Introductionmentioning

confidence: 92%

“…As n k gets smaller, the expected costs of signing an agreement with j become greater. 10 Hence, it decreases the incentive to form a collusive agreement.…”

Section: Incentives To Form An Agreementmentioning

confidence: 99%

Collusive Networks in Market‐Sharing Agreements in the Presence of an Antitrust Authority

Roldán

2012

Economics Manag Strategy

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This paper studies how the presence of an antitrust authority affects market-sharing agreements made by firms in oligopolistic markets. These agreements prevent firms from entering each other´s market. The set of market-sharing agreements defines a collusive network, which is under suspicion by antitrust authorities. This paper shows that, from the firm´s point of view, the probability of being caught is endogenous and depends on the agreements each firm has signed. Stable collusive networks can be decomposed into a set of isolated firms and complete alliances of different sizes. While in the absence of the antitrust authority, a network is stable if its alliances are large enough, when the antitrust authority is considered, the network is stability depends on the network configuration as a whole. Antitrust laws may have a pro-competitive effect as they give Firms in large alliances more incentives to cut their agreements at once. JEL Classification: D43, K21, L41

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“…In some of our empirical analysis, we control for economy-wide merger activity to control for DOJ's overall workload. The data on total number of mergers in the U.S. are from the Federal Trade Commission merger series (1958)(1959)(1960)(1961)(1962)(1963)(1964)(1965)(1966)(1967)(1968)(1969)(1970)(1971)(1972)(1973)(1974)(1975)(1976)(1977) and Thompson's Financials (1978-2013. All monetary data are measured in real 2005 dollars.…”

Section: Data Descriptionmentioning

confidence: 99%

Policy Innovations, Political Preferences, and Cartel Prosecutions

Ghosal

Sokol

2016

Rev Ind Organ

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. pre-1978, 1978-1992, 1993-2003, and 2004-2013. Our empirical estimates show significant variation in the number of cartels prosecuted and the penalties imposed across the policy regimes. The more recent regimes are characterized by far fewer cartels prosecuted, but with substantially higher penalties levied on firms and individuals. While effective deterrence is one explanation for these patterns, we are more inclined to conclude that US cartel enforcement has seen an underlying shift away from focusing on smaller cartels to larger and multinational firms. In terms of political effects, our results reveal no clear inter-political party effect on cartel prosecutions, but there appear to be interesting intra-political party effects. We find that particular Presidencies matter for cartel prosecutions, and variation across Presidential administrations led to marked shifts in the total number of cartels prosecuted. Overall, the shifts in the number of cartels prosecuted and penalties levied portray changing policy priorities and a search for the optimal enforcement design to curtail one of the clearest sources of welfare loss, collusion. Terms of use: Documents inJEL-Code: K210, L410, L130, L110.

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On the Design of Leniency Programs

Cited by 108 publications

References 13 publications

Crime and Punishment: When Tougher Antitrust Enforcement Leads to Higher Overcharge

Crime and Punishment: When Tougher Antitrust Enforcement Leads to Higher Overcharge

Collusive Networks in Market‐Sharing Agreements in the Presence of an Antitrust Authority

Policy Innovations, Political Preferences, and Cartel Prosecutions

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