The impact of the corporate leniency program on cartel formation and the cartel price path
By Joe Chen, Joseph E. Harrington Jr.. 2005
111 citations recorded by the source corpus.
Previous research exploring the effect of corporate leniency programs has modelled the oligopoly stage game as a Prisoners?Dilemma. Using numerical analysis, we consider the Bertrand price game and allow the probability of detection and penalties to be sensitive to firms?prices. Consistent with earlier results, a maximal leniency program necessarily makes collusion more difficult. However, we also find that partial leniency programs - such as in the U.S. - can make collusion easier compared to offering no leniency. We also show that even if cartel formation is not deterred, a leniency program can reduce the prices charged by firms.
Subfields: Accounting, Economics and Econometrics, Marketing
View Paper: https://www.semanticscholar.org/paper/def263ceaf4bc1398400f96f9d63343971e3c028
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Citations in the corpus
- Strategic Leniency and Cartel Enforcement (2009, background): “The data consist of all indictments and information reports filed for violations of Section 1 of the Sherman Act between January 1, 1985 and March 15, 2005.(7) Information reports do not require a grand jury and are typically filed in conjunction with plea agreements from one or more defendants.”
- Optimal Corporate Leniency Programs (2008, unknown): “E [V |ρ, θ ] = (1− ω) {π + δE [V |ρ, θ ]} (2)”