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Cartel Ringleaders and the Corporate Leniency Program

CCP Working Paper 11-13

23 Pages Posted: 15 Aug 2011  

Iwan Bos

Maastricht University

Frederick Wandschneider

University of East Anglia (UEA) - Centre for Competition Policy; University of East Anglia (UEA) - School of Economic and Social Studies; University of East Anglia (UEA) - Centre for Behavioural and Experimental Social Science (CBESS)

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Date Written: August 15, 2011

Abstract

Cartel ringleaders can apply for amnesty in some jurisdictions (e.g., the E.U.), whereas in others they are excluded (e.g., the U.S.). This paper provides a survey of identified ringleaders in recent European cartel cases and explores theoretically the effect of ringleader exclusion on collusive prices. Our survey shows that cartels often had more than one ringleader, the role of ringleaders was very diverse and ringleaders were typically the largest cartel members. Our theoretical analysis reveals that ringleader exclusion leads to higher prices when the joint profit maximum cannot be sustained under a non-discriminatory leniency policy, antitrust fines depend on individual cartel gains in a nonlinear fashion and the size distribution of members is sufficiently heterogeneous. These findings support the imposition of antitrust penalties proportional to firm size when ringleaders are excluded from the corporate leniency program.

Keywords: cartels, leniency program, ringleader

JEL Classification: L1, L4

Suggested Citation

Bos, Iwan and Wandschneider, Frederick, Cartel Ringleaders and the Corporate Leniency Program (August 15, 2011). CCP Working Paper 11-13. Available at SSRN: https://ssrn.com/abstract=1910000 or http://dx.doi.org/10.2139/ssrn.1910000

Iwan Bos (Contact Author)

Maastricht University ( email )

P.O. Box 616
Maastricht, 6200MD
Netherlands

Frederick Wandschneider

University of East Anglia (UEA) - Centre for Competition Policy ( email )

UEA
Norwich Research Park
Norwich, Norfolk NR47TJ
United Kingdom

University of East Anglia (UEA) - School of Economic and Social Studies ( email )

Norwich, Norfolk NR4 7TJ
United Kingdom

University of East Anglia (UEA) - Centre for Behavioural and Experimental Social Science (CBESS) ( email )

United Kingdom

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