Working Paper: CEPR ID: DP2349
Authors: Massimo Motta; Michele Polo
Abstract: We study the enforcement of competition policy against collusion under Leniency Programs, which give reduced fines to firms revealing information to the Antitrust Authority. Such programs give firms an incentive to break collusion, but may also have a pro-collusive effect, since they decrease the expected cost of misbehaviour. We analyze the optimal policy under alternative rules, obtaining a ranking of the different schemes and showing when the use of reduced fines may improve antitrust enforcement.
Keywords: antitrust; cartels; collusion; optimal deterrence; amnesties
JEL Codes: D21; K20; L40
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| leniency programs (K40) | collusion incentives (D43) |
| leniency programs (K40) | probability of expost desistence from collusion (C73) |
| leniency programs (K40) | cooperation with the AA (C71) |
| leniency programs (K40) | overall welfare gains (D69) |
| sufficient resources by AA (Q32) | revealing information (D83) |
| leniency programs (K40) | effectiveness of enforcement (K40) |