Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2008-12-17
Number: 08-120/1
Author-Name: Harold Houba
Author-Email: hhouba@feweb.vu.nl
Author-Workplace-Name: VU University Amsterdam
Author-Name: Evgenia Motchenkova
Author-Email: emotchenkova@feweb.vu.nl
Author-Workplace-Name: VU University Amsterdam
Author-Name: Quan Wen
Author-Email: quan.wen@vanderbilt.edu
Author-Workplace-Name: Vanderbilt University, Nashville (TN), USA
Title: Maximal Cartel Pricing and Leniency Programs
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.
Classification-JEL: L41, K21, C72
Keywords: Cartel, Antitrust Policy, Antitrust Law, Antitrust regulation, Leniency program, Self-reporting, repeated game
File-Url: https://papers.tinbergen.nl/08120.pdf
File-Format: application/pdf
File-Size: 347733 bytes
Handle: RePEc:tin:wpaper:20080120