Delays in Leniency Application: Is There Really a Race to the Enforcer's Door?

29 Pages Posted: 12 Dec 2012 Last revised: 14 Dec 2012

See all articles by Dennis L. Gärtner

Dennis L. Gärtner

University of St. Gallen

Jun Zhou

Department of Economics, Bar-Ilan University; Tilburg Law and Economics Center (TILEC)

Date Written: November 1, 2012

Abstract

This paper studies cartels' strategic behavior in delaying leniency applications, a take-up decision that has been ignored in the previous literature. Using European Commission decisions issued over a 16-year span, we show, contrary to common beliefs and the existing literature, that conspirators often apply for leniency long after a cartel collapses. We estimate hazard and probit models to study the determinants of leniency-application delays. Statistical tests find that delays are symmetrically affected by antitrust policies and macroeconomic fluctuations. Our results shed light on the design of enforcement programs against cartels and other forms of conspiracy.

Keywords: corporate leniency program, cartel, leniency application delays

JEL Classification: D43, K21, K42, L13

Suggested Citation

Gärtner, Dennis L. and Zhou, Jun, Delays in Leniency Application: Is There Really a Race to the Enforcer's Door? (November 1, 2012). Available at SSRN: https://ssrn.com/abstract=2188141 or http://dx.doi.org/10.2139/ssrn.2188141

Dennis L. Gärtner

University of St. Gallen ( email )

Bodanstrasse 6
St Gallen, 9000
Switzerland

Jun Zhou (Contact Author)

Department of Economics, Bar-Ilan University ( email )

Ramat Gan
Ramat Gan, 52900
Israel

Tilburg Law and Economics Center (TILEC) ( email )

Warandelaan 2
Tilburg, 5000 LE
Netherlands

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