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Cartel Destabilization and Leniency Programs – Empirical Evidence

31 Pages Posted: 31 May 2011  

Gordon Klein

affiliation not provided to SSRN

Date Written: May 1, 2011

Abstract

Leniency programs as a tool for cartel detection and cartel destabilization, have been implemented since the early nineties. Theoretical work has shown that leniency programs can be eff ective in enhancing cartel detection and deterrence, but these e ffects are not straight-forward. It is even possible that there is an increase in the total number of cartels. Empirical evidence shows that the positive e ffect on cartel deterrence seems to dominate, but cannot provide definite evidence, as inference is derived only by detected cartels. This study uses a more direct measure of success: the intensity of competition at the industry level of OECD countries. An instrumental variable approach, reveals a positive e ffect on industries' competition intensity of leniency programs indicating e ffectiveness in cartel destabilization and eff ective deterrence.

Keywords: cartel, antitrust, leniency program

JEL Classification: C23, K21, K42, L41

Suggested Citation

Klein, Gordon, Cartel Destabilization and Leniency Programs – Empirical Evidence (May 1, 2011). ZEW - Centre for European Economic Research Discussion Paper No. 10-107. Available at SSRN: https://ssrn.com/abstract=1854426 or http://dx.doi.org/10.2139/ssrn.1854426

Gordon Klein (Contact Author)

affiliation not provided to SSRN ( email )

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