Effects of Leniency Programs on Cartel Stability

Motchenkova, Evgenia

doi:10.2139/ssrn.617224

Cited by 27 publications

(18 citation statements)

References 12 publications

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“…See also , who argue that overall, implementation of amnesty/leniency programmes has a negative effect on cartel formation. On the same point, see also , Motta and Polo (2003), Spagnolo (2003), , Motchenkova (2004), and . However, some authors have questioned the effectiveness of amnesty/leniency programmes to deter and desist cartel behaviour (see, for example, Brenner 2009 and, both on the EC leniency programme).…”

Section: Limits Of Amnesty/leniency Programmesmentioning

confidence: 67%

Prosecuting Cartels without Direct Evidence of Agreement

2009

OECD Journal: Competition Law and Policy

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Circumstantial evidence is employed in cartel cases in all countries. The better practice is to use circumstantial evidence holistically, giving it cumulative effect, rather than on an item-by-item basis. Complicating the use of circumstantial evidence are provisions in national competition laws that variously define the nature of agreements that are subject to the law. There are two general types of circumstantial evidence: communication evidence and economic evidence. Of the two, communication evidence is considered to be the more important. Economic evidence is almost always ambiguous. It could be consistent with either agreement or independent action. Therefore it requires careful analysis. National treatment of cartels, such as whether they are prosecuted as crimes or as administrative violations, can affect the burden of proof that applies to the cases, and hence the use of circumstantial evidence. It can be difficult to convince courts to accept circumstantial evidence in cartel cases, especially where the potential liability for having violated the anti-cartel provisions of the competition law is high. There are circumstances in countries that are relatively new to anti-cartel enforcement that could affect the extent to which they rely on circumstantial evidence in their cases.

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Section: Limits Of Amnesty/leniency Programmesmentioning

confidence: 67%

Prosecuting Cartels without Direct Evidence of Agreement

2009

OECD Journal: Competition Law and Policy

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“…The absence of a leniency program can be treated as a special case by setting The issue of multiple self-reporting …rms has been much discussed in the literature, see e.g. Spagnolo (2007) and Motchenkova (2004), because the largest …ne reduction in many countries applies only to the …rst self-reporting …rm and all other …rms would pay higher …nes up to the full …ne. Given that the decisions to self-report are taken simultaneously, our model cannot capture the "…rst" self-reporting …rm.…”

Section: Leniency Programsmentioning

confidence: 99%

“…Recently, optimal implementation of antitrust policy for cartel enforcement has been analyzed in e.g. Motta and Polo (2003), Spagnolo (2004Spagnolo ( , 2007, Harrington (2004Harrington ( , 2005, Hinloopen (2003Hinloopen ( , 2006, Motchenkova (2004), Buccirossi and Spagnolo (2006) and Harrington and Chen (2006).…”

Section: Introductionmentioning

confidence: 99%

Maximal Cartel Pricing and Leniency Programs

Motchenkova¹,

Houba

Wen

2008

SSRN Journal

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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 maximalsustainable cartel price. This impact depends upon industry characteristics including its cartel culture. Our analysis disentangles the e¤ects of traditional antitrust regulation and the leniency program. Ex-ante leniency programs are e¤ective if and only if these o¤er substantial rewards to the self-reporting …rm. This is in contrast to currently employed programs that are therefore ine¤ective.

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“…See, for example, Spagnolo (2004), Motchenkova (2004), Motchenkova and van der Laan (2005), or Buccorosi and Spagnolo (2001). The question of optimal design of leniency programs has two main debatable components.…”

Section: Literature Reviewmentioning

confidence: 99%

To Protect in Order to Serve, Adverse Effects of Leniency Programs in View of Industry Asymmetry

Leliefeld

Motchenkova²

2007

SSRN Journal

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This paper studies the application of leniency programs. An analysis of the structure and design of leniency programs and existing literature raises a new question: Are leniency programs effective, in the sense that they deter cartels from formation, in asymmetrical markets? A game theoretical model, which allows for asymmetry and predatory pricing, is used to provide an answer. A leniency program does not always lead to a breach of trust. We find that, in certain industries, leniency programs are unable to break collusion. They may have the adverse effect in the sense that they strengthen cartel stability or may even lead to abuse of market power. A relatively large firm can use coercion to remove the option to a smaller firm to self-report to the authorities, thus removing the risk of prosecution posed by the program. In industries characterized by a certain degree of asymmetry in market shares and high sunk costs this is an even more likely scenario. In view of this limitation, a number of policy implications are provided in the paper. Policies aimed at the removal of the threat of retaliation need to be considered in order to convict and deter these kinds of cartels. JEL-Classification: K21, L41

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Effects of Leniency Programs on Cartel Stability

Cited by 27 publications

References 12 publications

Prosecuting Cartels without Direct Evidence of Agreement

Prosecuting Cartels without Direct Evidence of Agreement

Maximal Cartel Pricing and Leniency Programs

To Protect in Order to Serve, Adverse Effects of Leniency Programs in View of Industry Asymmetry

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