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Maximal Cartel Pricing and Leniency Programs


Harold Houba


VU University Amsterdam - Department of Econometrics; Tinbergen Institute

Evgenia Motchenkova


VU University Amsterdam - Department of Economics; TILEC

Quan Wen


Vanderbilt University - College of Arts and Science - Department of Economics
December 2008

TILEC Discussion Paper No. 2008-046
Tinbergen Institute Discussion Paper No. 08-120/1

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.

Number of Pages in PDF File: 38

Keywords: Cartel, Antitrust Policy, Antitrust Law, Leniency Program, Self-reporting, re-peated game

JEL Classification: L41, K21, C72

working papers series


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Date posted: December 18, 2008  

Suggested Citation

Houba, Harold E. D., Motchenkova, Evgenia and Wen, Quan, Maximal Cartel Pricing and Leniency Programs (December 2008). Tinbergen Institute Discussion Paper No. 08-120/1; Tinbergen Institute Discussion Paper No. 08-120/1. Available at SSRN: http://ssrn.com/abstract=1317635 or http://dx.doi.org/10.2139/ssrn.1317635

Contact Information

Harold E. D. Houba
VU University Amsterdam - Department of Econometrics ( email )
De Boelelaan 1105
1081 HV Amsterdam
Netherlands
HOME PAGE: http://staff.feweb.vu.nl/hhouba/
Tinbergen Institute ( email )
Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands
HOME PAGE: http://staff.feweb.vu.nl/hhouba/
Evgenia Motchenkova (Contact Author)
VU University Amsterdam - Department of Economics ( email )
De Boelelaan 1105
1081 HV Amsterdam
Netherlands
TILEC ( email )
Warandelaan 2
Tilburg, 5000 LE
Netherlands
Quan Wen
Vanderbilt University - College of Arts and Science - Department of Economics ( email )
Box 1819 Station B
Nashville, TN 37235-1819
United States
615-322-0174 (Phone)
615-343-8495 (Fax)
Feedback to SSRN (Beta)


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