Leniency Programs and Cartel Prosecution

IGIER Working Paper No. 150

37 Pages Posted: 7 Sep 1999

See all articles by Michele Polo

Michele Polo

Bocconi University - Department of Economics

Massimo Motta

Universitat Pompeu Fabra

Date Written: May 1999

Abstract

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

Polo, Michele and Motta, Massimo, Leniency Programs and Cartel Prosecution (May 1999). IGIER Working Paper No. 150. Available at SSRN: https://ssrn.com/abstract=165688 or http://dx.doi.org/10.2139/ssrn.165688

Michele Polo (Contact Author)

Bocconi University - Department of Economics ( email )

Via Gobbi 5
Milan, 20136
Italy

Massimo Motta

Universitat Pompeu Fabra ( email )

Ramon Trias Fargas 25-27
Barcelona, 08005
Spain

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