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Review of Industrial Organization

, Volume 52, Issue 3, pp 403–427 | Cite as

Optimal Leniency Programs When Firms Have Cumulative and Asymmetric Evidence

  • Marc Blatter
  • Winand Emons
  • Silvio Sticher
Article
  • 145 Downloads

Abstract

An antitrust authority deters collusion with the use of fines and a leniency program. 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 that firms report, the more likely is conviction. Furthermore, the evidence is distributed asymmetrically among firms. This set-up allows us meaningfully to analyze three typical features of leniency programs: minimum-evidence standards; ringleader discrimination; and marker systems. Minimum-evidence standards provide high-evidence firms with proper incentives to report. They are better at deterring than is ringleader discrimination. Under a marker system only one firm reports so that the antitrust authority never gets the entire available evidence. Appropriate minimum-evidence standards make a marker system redundant.

Keywords

Antitrust Cartels Deterrence Leniency Evidence 

JEL Classification

D43 K21 K42 L40 

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Copyright information

© Springer Science+Business Media, LLC 2017

Authors and Affiliations

  1. 1.Universität Bern, Swiss National BankBernSwitzerland
  2. 2.Departement VolkswirtschaftslehreUniversität Bern, CEPR, Swiss Competition CommissionBernSwitzerland
  3. 3.Swiss Federal RailwaysBernSwitzerland

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