Leniency Programs in the Presence of Judicial Errors
Nahom Tesfay Ghebrihiwet
affiliation not provided to SSRN
VU University Amsterdam - Department of Economics; TILEC
August 26, 2010
TILEC Discussion Paper No. 2010-030
We analyze the effects of antitrust and leniency programs in a repeated oligopoly model outlined in Motta and Polo (2003). We extend their framework by including the possibility of Type I judicial errors and pre-trial settlements. Through comparison of our results to the earlier results we come to a number of novel conclusions. Firstly, antitrust enforcement in the presence of judicial errors is less effective and ex-ante deterrence is weaker than was predicted by Motta and Polo (2003). Secondly, adverse effects of leniency programs are underestimated by the traditional approach, which does not take Type I judicial errors into account.
Number of Pages in PDF File: 23
Keywords: Collusion, Antitrust, Self-reporting, Judicial Errors, Repeated Game
JEL Classification: K21, L41, C72
Date posted: August 27, 2010
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