Leniency Programs and Cartel Prosecution
IGIER Working Paper No. 150
37 Pages Posted: 7 Sep 1999
Date Written: May 1999
We study the enforcement of competition policy against collusion under Leniency Programs, which give reduced fines to firms revealing information to the Antitrust Authority. Such programs give firms an incentive to break collusion, but may also have a pro-collusive effect, since they decrease the expected cost of misbehaviour. We analyze the optimal policy under alternative rules and with homogeneous and heterogeneous cartels, obtaining a ranking of the different schemes and showing when the use of reduced fines may improve antitrust enforcement.
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JEL Classification: L13, L44
Suggested Citation: Suggested Citation