When Can We Expect a Corporate Leniency Program to Result in Fewer Cartels?
44 Pages Posted: 26 Nov 2014
Date Written: August 11, 2014
Abstract
Leniency programs have become widespread and are generally quite active as reflected in the number of applications. What is not well-understood is how they affect the number of cartels. This paper develops and explores a theoretical framework to help understand when leniency programs are likely to be effective in reducing the presence of cartels. Plausible conditions are derived whereby a leniency program can result in more cartels. On a more positive note, we identify situations and policies that a competition authority can pursue that will make it more likely that a leniency program will have the intended effect of reducing the number of cartels.
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