Optimal Leniency Programs When Firms Have Cumulative and Asymmetric Evidence

40 Pages Posted: 2 Aug 2014 Last revised: 19 Nov 2016

See all articles by Marc Blatter

Marc Blatter

University of Bern

Winand Emons

University of Bern - Department of Economics; Centre for Economic Policy Research (CEPR)

Silvio Sticher

University of Bern

Date Written: August 2016

Abstract

An antitrust authority deters collusion using fines and a leniency program. Unlike in most of the earlier literature, our firms have imperfect cumulative evidence of the collusion. That is, cartel conviction is not automatic if one firm reports: reporting makes conviction only more likely, the more so, the more firms report. Furthermore, the evidence is distributed asymmetrically among firms. Asymmetry of the evidence can increase the cost of deterrence if the high-evidence firm chooses to remain silent. Minimum-evidence standards may counteract this effect. Under a marker system only one firm reports; this may increase the cost of deterrence.

Keywords: antitrust, cartels, deterrence, leniency, evidence

JEL Classification: D43, K21, K42, L40

Suggested Citation

Blatter, Marc and Emons, Winand and Sticher, Silvio, Optimal Leniency Programs When Firms Have Cumulative and Asymmetric Evidence (August 2016). Available at SSRN: https://ssrn.com/abstract=2474998 or http://dx.doi.org/10.2139/ssrn.2474998

Marc Blatter

University of Bern ( email )

Gesellschaftsstrasse 49
Bern, BERN 3001
Switzerland

Winand Emons (Contact Author)

University of Bern - Department of Economics ( email )

Schanzeneckstrasse 1
Postfach 8573
CH-3001 Bern
Switzerland
+41 31 631 3922 (Phone)
+41 31 631 3783 (Fax)

HOME PAGE: http://staff.vwi.unibe.ch/emons

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Silvio Sticher

University of Bern ( email )

Gesellschaftsstrasse 49
Bern, BERN 3001
Switzerland

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