The Effects of Private Damage Claims on Cartel Activity: Experimental Evidence

Cartels are often fought by granting leniency, in the form of forgiveness of penalties, to whistle-blowers. This study employs a laboratory experiment to compare leniency programs that differ with respect to fine size and whether a second whistle-blower may apply for leniency. The results show that leniency does not affect the probability that a cartel forms, but is effective in exposing cartels and thereby inhibiting cartel success. Higher fines are more effective, but allowing leniency to a second whistle-blower is no more effective than granting leniency to only one whistle-blower.

Section: Previous Related Literaturementioning

confidence: 99%

Leniency Policies and Cartel Success: An Experiment

Kim,

Noussair

2023

Corporate Leniency Programs for Antitrust: Past, Present, and Future

Hinloopen,

Onderstal,

Soetevent

2023

This special issue marks the 25th anniversary of the introduction of a leniency program for antitrust in the EU and contains five original papers: Each paper examines the effects of design parameters of leniency programs on their performance. Before introducing each contribution separately, we put them in perspective by introducing readers to the existing theoretical, empirical, and experimental literature on corporate leniency programs for antitrust.

Leniency Inflation, Cartel Damages, and Criminalization

Marvão,

Spagnolo

2023

We revisit the pros and cons of introducing cartel criminalization in the EU. We document the recent EU “leniency inflation”, whereby leniency has been increasingly awarded to many (or all) cartel members, which softens the “courthouse race” effect. Coupled with the insufficient protection of leniency applicants from damages (2014 Damages Directive), it may have led to a decrease in leniency applications and cartel convictions. Given the current level of fines, criminalization may have to be introduced. We then explore US criminal sanctions (1990–2015) to highlight potential areas of concern for EU policymakers, of which recidivism appears to be a significant one.