The Effects of Leniency Programs and Fines on Cartel Stability

Chavda, Ankur; Jegers, Marc

doi:10.1111/j.1467-999X.2007.00266.x

The Effects of Leniency Programs and Fines on Cartel Stability

Metroeconomica, Vol. 58, No. 2, pp. 231-243, May 2007

13 Pages Posted: 2 May 2007

See all articles by Ankur Chavda

Marc Jegers

Free University of Brussels (VUB) - Micro-Economics for Profit and Non Profit Sector (MICE)

Abstract

Using a stylized oligopoly model, we analyze the effect of cartel deterring fines, taking into consideration exemptions granted to cartel members cooperating with the competition authorities. We conclude that the fines can act as a deterrent to breaking collusive agreements, thus stabilizing the cartel.

Suggested Citation: Suggested Citation

Chavda, Ankur and Jegers, Marc, The Effects of Leniency Programs and Fines on Cartel Stability. Metroeconomica, Vol. 58, No. 2, pp. 231-243, May 2007. Available at SSRN: https://ssrn.com/abstract=981594 or http://dx.doi.org/10.1111/j.1467-999X.2007.00266.x